Economic Climate Indicators: Seasonal Adjustment or Repeated Surveys

To establish economic climate indicators, most countries organize business surveys repeated at regular time intervals. Business surveys are thus repeated surveys. These countries often use seasonal adjustment procedures to obtain the estimator of the business cycle. The main question in repeated surveys is how to summarize the results, and different approaches are suggested in the literature. In this study, we present an analysis of the data from business surveys for each province of the Netherlands and a subset of questions completed by a simulation-based study. We consider the seasonal adjustment with Tramo-Seats and the simplest repeated-survey approach suggested by the literature, a weighted average between the direct estimate and an ARIMA forecast. The results show that the simplest repeated survey methods for business surveys provide better results than the existing estimators. We conclude that the business surveys for deriving economic climate indicators should benefit from a repeated-survey approach (not only the most straightforward method we use here, but also the more advanced methods) instead of seasonal adjustment recommended by the European Commission, or perhaps a combination of the two. The availability of seasonally unadjusted results from the business surveys for the different countries is needed to be able to confirm the conclusion.