engleski

Business Climate Indicator – New Composite Indicator in Croatia's Business Survey

The aim of this paper was to examine the possibility of calculating the Business Climate Indicator in Croatia's Business Survey. The principal component factor analysis was performed to calculate this new composite indicator. It was conducted for the business survey in manufacturing industry. Five variables were used: production trends in recent past, order books, stock of finished products, export order book and production expectations. The time series from the second quarter of 1995 to the second quarter of 2008 were considered. The appropriateness of factor analysis was evaluated and it was shown that the data are appropriate for using the factor analysis. The Augmented Dickey– Fuller (ADF) unit root tests were performed and all series were taken to be stationary. One factor was extracted, based on the eigenvalue criterion. This retained factor alone explains 64.98% of the total variance of the five used variables. It was labelled the Business Climate Indicator. The factor scores were calculated. The correlation analyses on the Business Climate Indicator and manufacturing industrial production (expressed as a percentage rate of change, y-o-y) were conducted. The business survey results refer to the changes of variables and it was of interest here to track only the direction of changes in a referent series, not the absolute amount of changes. The highest correlation coefficient between mentioned variables was for the lead of two quarters. With a lead of two quarters, the Business Climate Indicator predicts correctly, in round 58% cases, changes in the direction of the volume of industrial production ; expressed as a percentage rate of change, y-o-y. The results of analysis confirmed predictive properties of Croatia’ s Business Survey results, especially of the Business Climate Indicator as a new confidence indicator.

Business Survey; Composite Indicators; Business Climate Indicator; Multivariate Analysis; Factor Analysis

nije evidentirano