Puntuación alcanzada evaluada según la escala SCAA

In addition to information on national output, there is a wide variety o f important economic

indicators relating to industry and commerce. All o f these indicators are valuable guides to the

past, present and future movements of both the output and expenditure measures o f GDP and

hence, the overall state o f the economy. In essence, national accounts provide a broad historic

picture o f the state o f an economy, while the output data break it down by market and industrial sector. The following are the main indicators o f industrial and commercial output and

expenditure.

4.5.6.1 Business conditions

This indicator provides anecdotal evidence of business climate and is valuable as early warning

o f changes in economic cycle. Monthly or quarterly surveys are conducted to obtain industrial

companies' general perception and expectations relating to business conditions, usually in

manufacturing. Responses are subjective but they give early signals o f changes in economic

trends. The indicator can be presented as an index number or a percentage balance o f optimistic

and pessimistic companies. For instance, in the former case, a composite index above 50

sector. In any case, the main focus of interpretation is on trends.

4.5.62 Industrial and manufacturing production

The output o f production industries is the total o f value-added output o f manufacturing

companies, mines, energy (oil and gas) and water supply industries. In this case, value-added is

the basis o f measurement, that is, the value o f output less the cost o f raw materials and other

inputs, since the main concern is to indicate the net contribution o f production industries to GDP.

It is common to distinguish manufacturing production from total output or industrial production

to obtain the value-added output o f manufacturing companies only. Hence, two series are

released together. On the average, the difference between manufacturing and industrial

production is about 10 per cent (The Economist, 1994). This gap is more significant where the

energy producing sector is large. Generally, indicators o f production industries output are strongly indicative o f the state of the business cycle. This is because the output o f industries that

produce capital goods and consumer durables is significantly reduced and increased in a recession and recovery, respectively. They are presented as index numbers in volume terms and

the focus o f interpretation is on trends in volume terms.

4.5.6.3 Manufacturing orders

This is an indicator of new orders received by manufacturing companies. It is indicative of

output in the short term and generally, there is a knock-on effect from such orders. For instance,

an order for refrigerators would prompt an order for metal pressing, which in turn would invoke

an order for sheet steel. Buoyant order books indicate upward pressure on employment and

output over the next few months. Although this is a good sign, it may also suggest a rise in

inflation if the economy is already operating at close to full capacity. High order backlogs or low

inventories may also be worrying signs; bottlenecks in one industry create shortages of inputs in

others. Strong orders also tend to increase imports o f materials and intermediate goods, but this

may be offset by exports. Orders also provide an early signal o f changes in the economic cycle.

A rise in orders may indicate the end o f a recession, and a fall may indicate that the cycle is

peaking. Normally, total orders are distinguished between domestic and export. Domestic orders

by sector are indicative o f the structure o f local demand. Larger orders for capital goods suggest

more investment activity and more output in the future. Orders from overseas reflect export

m anufacturing companies and the information obtained on new orders by sector is presented as

money totals or index numbers. Interpretation o f these figures is based on the structure and

trends.

4.S.6.4 Construction orders and output

The measures o f construction orders and output are concerned with activity in the construction sector. They are generally indicative o f new investments and future output. There are several

m ain series including; orders; permit issued; the value o f work put in place; and value-added in

nom inal and real terms. Construction orders signal future demand for building materials and

labour. They also produce knock-on effects for other sectors o f the economy such as the service

and manufacturing industries. Value-added in construction indicates the net contribution of

construction to GDP, and hence reflects the significance o f construction in the whole economy.

Since construction work is fixed investment, it contributes to GDP and lays the basis for fiiture

economic growth. New factory and office buildings provide a direct foundation for higher

economic output. New infrastructure improves social welfare and generally boosts productivity.

Construction orders and output indicators are presented as values o f orders or volumes of construction, but their interpretation focuses on trends in volume terms.

4.5.6 5 Housing starts, completions and sales

These are three different measures of housing construction. The three main series indicate: the

number o f residential dwellings that have commenced construction; the number o f residential dwellings that have completed construction; and the number o f residential dwellings sold. For

each series, the figures are distinguished between private and public dwellings.

A housing start takes place when foundation work has begun. It reflects the level o f demand for

construction, and hence, demand for construction materials and labour over the next few months.

It also implies a housing completion at the end o f the construction period. New housing

constmction is important to the overall economy. Construction results in the hiring o f workers,

the production o f construction materials and equipment, and the sale o f large household

appliances and furniture. The rate of new housing construction is heavily influenced by the

growth o f the number o f households in the long run, and by the growth o f real family income and

little need to replace them frequently, the purchase o f new housing is usually deferred until

incomes and interest rates make it affordable. Typically, housing starts increase when interest

rates are low or incomes in general are rising, and they fall when interest rates are high or

incomes are growing slowly or declining. Hence, housing starts fluctuate considerably during

business cycles.

A housing completion is indicative o f a house sale, a new mortgage advance and increased

consumer demand for frimishings and fittings. Housing sales are linked to the level o f

completions, but the main focus is on turnover of existing dwellings. Housing turnover is usually

stimulated by surging house prices, rising incomes relative to house prices and lower mortgage

rates which encourage borrowing. In general, residential construction is a good leading indicator

o f economic activity (The Economist, 1994). Housing starts have been classified as a leading

indicator o f business activity (Frumkin, 1994). As interest rates rise, housing starts will fall,

signalling a downturn; a revival o f house-building usually means economic recovery is

forthcoming. The indicators are presented as number o f units per month and their interpretation

is based on trends.

4.S.6.6 Wholesale sales or turnover, orders and stocks

This indicator measures sales by wholesalers and is mainly indicative o f general demand. A fall in wholesale sales or a rise in wholesale inventories usually suggests or confrrms slack in

business and retail demand. Wholesale sales are also an important link in the supply chain.

Wholesalers channel imports and domestically produced or processed goods through to final

users. Where stocks and orders are available, they provide a useful check on economic trends.

M ost importantly, the volume of sales for durable goods is an early indicator o f demand

pressures. It is presented as monthly index numbers, and the rate o f change in the volume of

sales is the main focus o f interpretation.