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European Commission 2005

European Commission Directorate General Economic and Financial Affairs. Comparison of National versus European Commission Confidence Indicators. Presentation by Maarten Van der Stadt Joint EC-OECD Workshop on International Development of Business and Consumer Tendency Surveys

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European Commission 2005

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  1. European Commission Directorate General Economic and Financial Affairs Comparison of National versus European Commission Confidence Indicators Presentation by Maarten Van der Stadt Joint EC-OECD Workshop on International Development of Business and Consumer Tendency Surveys Brussels, 14-15 November 2005 European Commission 2005

  2. INTRODUCTION • Joint Harmonised EU Programme of Business and Consumer Surveys • Monthly and quarterly surveys • Carried out at country level • All EU Member States • Harmonised questionnaire • Institutes like: IFO (Germany) INSEE (France) ISAE (Italy European Commission 2005

  3. SECTORS • Industry • Services • Construction • Retail • Consumers (households) • Overall-activity related indicator • ESI European Commission 2005

  4. SCOPE • National survey results • Same basic data • Sometimes different outcomes • Factors behind the divergences European Commission 2005

  5. Content of presentation • EC methodology • Possible sources • Effect of methodological difference European Commission 2005

  6. EC Methodology • Balance statistics • Three way questions: B = P – N • Five way questions: B = PP + 0.5P – 0.5N - NN • Seasonal adjustment & smoothing • Dainties • No smoothing European Commission 2005

  7. EC methodology (cntd) • Confidence indicators • Questions used • Simple average • ESI • Same questions • Standardised to mean 0, stadev 1 • Fixed weights European Commission 2005

  8. Possible sources of differences • Rounding • Quantification • Seasonal Adjustment • Smoothing • Selection of questions • Weighting scheme • Standardisation • Sector coverage European Commission 2005

  9. Analysis • Graphical comparison level series • Correlation coefficient level series • Graphical comparison month on month change • Correlation coefficient m-o-m change • Concordance of direction of change European Commission 2005

  10. Examples • Finish CCI: s.a. vs non-s.a. indicator • Danish ICI: Different method of s.a. • Italian ICI: Different method of s.a. • Hungarian CCI: Different questions • French ICI: Combination of differences • German ESI vs IFO BCI • German ICI vs IFO BCI European Commission 2005

  11. Finish CCI (seasonal adjustment) European Commission 2005

  12. Finish CCI (cntd) • Good fit at levels (correl: 0.94) • M-o-m changes • Less strong correspondence (cc: 0.83) • 16% of cases different direction of change • S.A. has noticeable effect on m-o-m changes European Commission 2005

  13. Danish ICI (seasaonal adjustment) European Commission 2005

  14. Danish ICI (cntd) • High correspondence at level (cc: 0.96) • M-o-m change • Less correcpondance (cc: 0.83) • 9% of cases different direction of change • Surprisingly high, but smaller than non-s.a. European Commission 2005

  15. Italian ICI (seasonal adjustment) European Commission 2005

  16. Italian ICI (ctnd) • Levels nearly identical (cc: 0.99) • M-o-m changes • Still fairly high correspondence (cc: 0.90) • 14% of cases difference direction of change • Surprisingly high number in light of high correspondence European Commission 2005

  17. Hungarian ICI (different questions) European Commission 2005

  18. Hungarian CCI (cntd) • Level series nearly identical (cc: 0.99) • M-o-m changes • Correlation declines to 0.86 • 8% of cases different direction of change European Commission 2005

  19. French ICI (several method. Diff.) European Commission 2005

  20. French ICI (cntd) • High correspondence at levels (cc: 0.97) • M-o-m change • Much lower correspondence (cc: 0.72) • Nearly 1 in 4 cases different direction of change European Commission 2005

  21. Ifo indicator – EC ESI for Germany European Commission 2005

  22. Ifo indicator – EC ESI (cntd) • Level • Cc of 0.88 surprisingly high • EC clearly lags the IFO • M-o-m- changes • Very low correspondence (cc: 0.46) • 1/3 of observations do not coincide in d.o.c European Commission 2005

  23. Ifo indicator – EC ICI for Germany European Commission 2005

  24. Ifo Indicator – EC ICI (cntd) • Level visually fits better, but cc still 0.88 • M-o-m change • cc somewhat higher than for ESI (0.58) • Smaller share (0.25) point in different direction • ICI fits better then ECI • Considerable differences European Commission 2005

  25. CONCLUSIONS • At level series effect of methodological differences is relatively small • Effect on m-o-m changes can be considerable • Seasonal adjustment • S.A. has noticeable effect on m-o-m change • Effect of method of s.a. is smaller, but by far not negligable • Selected questions • Large overlap: no strong effect • Small overlap: more substantial deviations • Different sector coverage in OAI can lead to substantial difference • Number of dimensions • The more dimensions differ, the more discrepancies. European Commission 2005

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