Early indicators derived from survey data: adequate construction design and forecasting quality

The Ifo surveys are marked by a broad coverage of the economy according to sectors, industries and products as well as additional, future-oriented factors. This results is a whole series of powerful early indicators. The forecast quality becomes all the more apparent when they are linked together in a composite indicator. These data together with the GfK consumer survey information provide an instrument based solely on qualitative variables that provide early and reliable signals on trends in the economic situation. The attempt to further refine this approach by adding quantitative early indictors has only produced limited success.