engleski

Confidence indicators for Croatia: a business cycle analysis on the supply side

Information on business and consumer confidence, obtained through the tendency surveys and shaped in so-called confidence indicators, are systematically collected to signal changes in economic activity, detect turning points within the economic cycle, provide macroeconomic surveillance and design short-term assessments and forecasts. Both on the national and international level, sectoral confidence indicators such as Construction confidence indicator, Industrial confidence indicator, Retail trade confidence indicator, Services confidence indicator and Consumer confidence indicator depict the short-term perspective of relevant economic domains. Since they are calculated regularly, on a monthly base, confidence indicators precede official statistical data and are used to help both private and public sector decision makers to check their performance and plan their actions. In that manner, the objective of this paper is to evaluate whether the dynamics of confidence indicators can be related to the dynamics of relevant macroeconomic variables on the supply-side in Croatia. We analyzed the bond (cross-correlations) and causality (Granger causality) between five sectoral confidence indicators and selected macroeconomic variables, and in addition offered distinct results from VAR analysis to collaborate it with previous conclusions. Results indicate weak to moderate association between the observed variables, suggesting their limited role in future estimations and speculations.

confidence indicators, business cycles, sectoral analysis, cross-correlations, Granger causality, supply-side, Croatia

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