Why did INEGI implement the business cycle

clock of Mexico?Eduardo Sojo Garza-Aldape

National Institute of Statistics and Geography, MexicoFebruary 21st, 2011

New York

To provide users with a better visualization tool of economic and social phenomena.

To improve the estimation and dissemination of short-term economic indicators.

To follow what we consider the best international practices.

As an element of an overall strategy…

“One of the best techniques for understanding data is to visualize the numbers as a picture. This can make it far easier to see a pattern or it can expose patterns that might otherwise have been concealed.”

Making Data Meaningful, United Nations Economic Commission for Europe.

To provide users with a better visualization tool of economic and social phenomena…

We have introduced:• Gapminder to visualize regional historical

data.• Extensive use of interactive digital

mapping.• Statistics and geography for kids.• Easy access to short-term economic

indicators in a graph.• Business cycle clock.

To provide users with a better visualization tool of economic and social phenomena…

“The financial and economic crisis has produced an impact on statistics by pointing out the need for statistical information going beyond GDP and complementing it with other macroeconomic indicators more or less directly related to GDP.”

Roberto Barcellan, Eurostat. Flash Estimates of GDP, Third International Seminar on Early Warning and Business Cycle Indicators.

To improve the estimation and dissemination of short-term economic indicators…

We have:• Monthly indicator of Economic Activity

(“monthly GDP”).• Monthly consumer and producer sentiment

indicators.• Seasonally adjusted short-term indicators.• We are working in a flash estimate of

quarterly GDP.• We developed the Business cycle

indicators: the coincident indicator and the leading indicator.

To improve the estimation and dissemination of short-term economic indicators…

Is a composite indicator showing the general state of the economy. It consists of:

• A monthly disaggregation of quarterly GDP• Industrial production index• Retail sales• Workers registered at the Mexican Institute of

Social Security • Urban unemployment rate• Total imports

The Coincident Indicator

The leading indicator anticipates the direction of the coincident indicator, particularly the turning points (peaks and troughs). Its components are:

•The manufacturing employment trend•Non-oil exports•Price index of the Mexican stock exchange•Real exchange rate•Interest rate

• Standard & Poor's 500 Index (USA)

The Leading Indicator

System of Cyclical Indicators:Coincident and Leading

1990.12

1998.11

2007.08(-9)

2009.02(-3)

1981.05(-6)

1982.09(-7)

1984.06(-10)

1986.07(-6)

1992.03(-1)

(-6)1994.02

1992.12(-10)

2000.05(-3)

2003.02(-7)

1987.07 1997.11

2004.03

2005.04

1995.04(-4)

E N M N E EE MJSNEMMJ NEMMJSNEMMJSNEMMJ EMMJSNEMMJSNEMMJSNEMMJSNEMMJSN MMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSNEMMJSN MMJSN E MMJSS S E M M J S N E M J M S N E M M J S N M M J

200820011980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2002 2003 2004 2005 2006 2007 2009 2010S N

95

96

97

98

99

100

101

102

103

104

105

Coincident Leading

To follow what we consider the best international practices

“Who gets close to a good tree, gets a good shadow”

To follow what we consider the best international practices

OECD

Eurostat

Statistics

Netherlands

“The Business Cycle Clock is a very attractive way to present information.

Thanks to the clock and the dashboard, you can interpret at a glance what is happening in the Mexican economy.”

Macario Schettino Economic analyst and journalist

Users´ reaction

“One of the most interesting news that INEGI released this year is called the Business Cycle Clock of Mexico.”

Enrique Quintana Economic analyst and journalist

“The Business Cycle Clock is a great gift. It is like an Xbox 360 for analysts. “It is useful, with high technologic content, fun, easy to use, with hard data, available on the INEGI´s website”.

Pedro Alonso Economic analyst and journalist

Users´ reaction

INEGI´s website

Why did INEGI implement the business cycle

clock of Mexico?Eduardo Sojo Garza-Aldape

National Institute of Statistics and Geography, MexicoFebruary 21st, 2011

New York