New method predicts economic growth more accurately using firm-level survey data.
Qualitative business survey data can predict economic activity before official data is released. This study looks at individual firm responses in surveys to create a more accurate early indicator of output growth. By analyzing how firms' answers relate to official data, the researchers found a better way to combine these responses for a more precise estimate of output growth. The new method outperformed traditional indicators when applied to survey data from the Confederation of British Industry.