engleski

Business and investment surveys in Croatia – a case study of an economy in transition

Business and investment surveys produce rather reliable base for forecasting activity in manufacturing industry, construction and in trade. Results of the surveys in the manufacturing industry and in investment test have been particularly encouraging. Factor analysis has indicated that, like in other economies, three factors determine changes in industrial production: (1) order books, (2) production expectations and (3) stock of finished products. Industrial confidence indicator (ICI) calculated on the basis of the three factors (balances) has in more than 70% cases correctly predicted changes in the direction of industrial production with a two quarters lead. Questioners contain some additional questions, like one, which refers to the problem of arrears and consequent liquidity hardships of the firms. In our research we got a rather surprising outcome, namely, in the period under observation, arrears turned out to be a proxy of the ICI. Investment surveys forecast correctly changes in the direction of investment activity and are close to the investment date from the National Accounts. Investment survey indicate a rather low level of investment, but a rather strong drive in the firms to increase productivity by improving technology and substituting labour with capital.

business and investment surveys; extraction of factors; confidence indicators; arrears; liquidity of the firms

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