• Organisation
• Progress report on implementation of harmonised business tendency surveys in Asia
• Supply of BTS results to OECD
• Training in composite leading indicators
• Future programme
• Annex 1: List of participants
• Annex 2.  Business Tendency Surveys in Asia
  • Table 1. Business tendency surveys in Asia/Pacific region: Survey characteristics
  • Table 2. Progress with Harmonisation of Business Tendency Surveys in Asia/Pacific region

Organisation

1. The Workshop was held from 22 to 26 October at the UN Conference Centre, Bangkok.  It was jointly sponsored by the Organisation for Economic Co-operation and Development, the Asian Development Bank and the UN Economic and Social Commission for Asia and the Pacific. The following countries participated: China, Hong Kong SAR, India, Indonesia, Lao PDR, Malaysia, Philippines, Republic of Korea, Singapore, Thailand, Vietnam. See Annex 1, List of Participants

2. There were two parts to the Workshop: two days for progress reports on implementation of harmonised business tendency surveys in Asia and three days for training in composite leading indicators.

Progress report on implementation of harmonised business tendency surveys in Asia

3. OECD staff introduced the OECD-EU harmonised business tendency survey programme at the first workshop in Manila, 1999.  A second workshop was held in 2000 in Bangkok, at which, the ADB initiated a regional technical assistance project (RETA) which provided funds for five countries to introduce harmonised business tendency surveys on a pilot basis: India, Indonesia, the Philippines, Thailand and Vietnam. Other countries not covered by the RETA also decided to move towards the harmonised BTS format, including Malaysia, China and Lao PDR.  At this third workshop, participants reported their progress since the 2000 meeting. Annex 2 contains two tables summarising business tendency surveys in Asia. Table 1 summarises the main features of business tendency surveys in Asia; Table 2 summarises the progress that has been made towards harmonisation over the last two years.

4. Points that came up in discussion:

• Business tendency surveys in several Asian countries cover several industrial sectors.  The harmonised system has separate questionnaires for industry, trade, construction and other sectors. Several questions are specific to particular kinds of activities so that it is difficult to design a single questionnaire for a broad group of industries.  The recommended solution is to confine the survey to a single kind of activity and OECD countries have found that industry (mining, manufacturing, electricity, gas and water) is the best sector to start with as it is usually the most cyclical.
• The harmonised form of the questions usually ask respondents to ignore seasonal factors in comparing demand, order books, prices, etc., with the situation in previous or future periods.  Some participants felt that respondents could not properly take account of seasonal variations and it would be better to drop this part of the question.  Most, though not all, surveys in OECD countries ask respondents to ignore seasonal variations although this remains an area where further research into respondent behaviour is called for.  The experience with surveys that ask respondents to discount seasonal factors is that the results are subject to less seasonal variation although it is not totally eliminated.
• Surveys in some countries have long histories. Users are comfortable with the existing questionnaires and may be disconcerted if existing questions are replaced by the new harmonised versions.  It was suggested that one possibility would be to run the two sets of questions in parallel for a few periods so that users understand the differences in response to the old and the new harmonised versions.
• Several participants requested advice on how to analyse results of business tendency surveys and how to present them.  For example, what are the relative merits of diffusion indices compared with the net balance method; how are replies to be interpreted to questions that refer to a moving, rather than to a fixed, base period?

Supply of BTS results to OECD

5. As noted above, several participants requested advice on how to analyse and present results of business tendency surveys. For this purpose, countries will send to the OECD Excel files containing historical data (balances) from business tendency survey (series corresponding to the harmonised questions). These will be used by the OECD for the preparation of papers for a future workshop on the analysis, interpretation and presentation of business tendency survey data.

6. Countries will send above requested data on a regular basis to the OECD. These data will be stored in a global database with BTS data for both OECD Member countries and non-member countries. These data will be made available via the OECD web site to all countries and institutions contributing to the development of this database. 

Training in composite leading indicators

7. The OECD Secretariat has developed a set of composite leading indicators (CLIs) for its Member countries.  The indicator for each country is made up by combining several statistical series that have, in the past, shown cyclical patterns that predate cycles in industrial production by about six months.  Because movements in industrial production are highly correlated with movements in Gross Domestic Product the CLIs can predict turning points in GDP, as well as industrial production, with a lead of approximately 6 months.

8. The OECD System of CLIs makes use of "qualitative" information from business tendency surveys as well as monetary and financial variables and statistics on trade, employment, transport, etc.  The selection is different for each country but in all cases they include qualitative series from business tendency surveys.  These are forward-looking data and they have been found to have good predictive value in all countries. The OECD-ADB-ESCAP programme to encourage wider use of business tendency surveys is thus closely linked with development of composite leading indicators.

9. The training programme was organised around two software packages - Demetra which is used for seasonal adjustment of sub-annual statistics and which has been developed by Eurostat, and the Composite Indicator software developed by the OECD.  For the training session, all participants were provided with PCs, the two software packages and user manuals. The training covered:

• Introduction to the theory of seasonal adjustment and description of X12-RegARIMA, and TRAMO-SEATS;
• Practical application of Demetra for seasonal adjustment  and relative merits of the two seasonal adjustment methods;
• Introduction to the theory of composite indicators (leading indicators in particular) and description of the OECD system;
• Use of the OECD Composite Indicator programmefor:
• Selection of the reference series - GDP, industrial production, or coincident indicators,
• Definition of the reference cycle by establishing  turning points in reference series,
• Selection of potential leading indicator series and estimation of  turning points,
• Criteria for identifying stable leading indicator series,
• Standardisation of amplitudes  for selected leading indicator series,
• Aggregation (weighted or unweighted) to obtain a composite leading indicator.

10. The participants successfully completed all stages in the training course.  Working with a standard set of data, participants were able to construct at least one composite leading indicator.  These were then compared with the CLI that had been developed by OECD staff using the same data set.

11. Two participants had already worked on the construction of leading indicators and were invited to share their experience.  In China, Mr Shi Faqi of the NBS has constructed CLIs in co-operation with the OECD; in Malaysia, Mr Mohd Yazid Kasim of the Department of Statistics has worked with the US Conference Board to construct leading indicators for Malaysia.

Future programme

12. The participants were unanimous that a further similar workshop in twelve months time would be essential to review further progress with the harmonised BTS and to consolidate the CLI training.

13. As regards business tendency surveys, Tables 1 and 2 show that several of the new surveys have only just started.  Exchange of experience would be particularly valuable on issues such as sample selection, relations with respondents, improving response rates, collection methods (electronic, paper, fax etc.) data editing and data analysis.

14. As regards composite leading indicators, participants at the training session worked with a set of data that had been "pre-selected" by OECD staff and which had already been seasonally adjusted.  In working with their own data, participants will need to:

• review what short-term economic series are available in their own countries;
• adjust them for seasonal variations (Demetra); and
• run the OECD Composite Indicator programme to date the business cycle, find turning points in candidate series and combine the selected series to form composite indicators.

15. At the next meeting, participants will exchange their experience, describe problems and solutions and present preliminary CLIs for their countries.

16. In response to the request by participants for a further meeting, the Secretariats of ESCAP, ADB and OECD agreed to investigate the possibilities of holding a workshop towards the end of 2002.  It could take place in Bangkok and would have two main agenda items - composite leading indicators and business tendency surveys.

Annex 1: LIST OF PARTICIPANTS

CHINA

• Mr Gao Huiqing,  Deputy Division Director, Department of Economic Forecasting, State Information Center
• Mr Lin Tao, Deputy Director, Business Survey Division, Enterprise Organization, National Bureau of Statistics 
• Mr Shi Faqi, Deputy Director, Comprehensive Division, National Accounts Department, National Bureau of Statistics

HONG KONG, CHINA

• Ms Wendy S. M. Hung, Statistician, Census and Statistics Department

INDIA

• Mr Tarlok Singh, Director, Department of Economic Analysis and Policy, Reserve Bank of India
• Mr Atul Sood, Senior Economist, National Council of Applied Economic Research Deputy Head of Survey Division

INDONESIA

• Mr Hari Utomo, Manager, Real Sector and Government Finance, Statistics Division, Directorate of Economic and Monetary Statistics, Bank of Indonesia 
• Mr Hamonangan Ritonga, Deputy Director for Cross-Sectoral Statistical Analysis, BPS Statistics Indonesia

LAO PEOPLE'S DEMOCRATIC REPUBLIC

• Mr Boonta Louangvixa, Deputy Head of Survey Division, National Statistical Centre, State Planning Committee
• Mr Bounmy Vilaychith, Senior Staff, National Statistical Centre, State Planning Committee

MALAYSIA

• Mr Koay Hock Eng, Assistant Director, Price Statistics Division,
• Mr Mohd Yazid Kasim,Assistant Director, National Accounts Statistics Division, Department of Statistics
• Ms Low Ai Loon, Manager, Economics Department, Bank Negara Malaysia

PHILIPPINES

• Ms Leticia D. De Leon, Statistical Coordination Officer VI, National Statistical Co-ordination Board
• Mr Antonio B. Cintura, Acting Deputy Director, Bangko Sentral ng Pilipinas
• Ms Ludivinia D. Gador, Bank Officer VI, Bangko Sentral ng Pilipinas

REPUBLIC OF KOREA

• Mr Won Kee Lee, Economist, Research Department, Bank of Korea

SINGAPORE

• Ms Koh Sok San, Statistician, Department of Statistics, Ministry of Trade and Industry
• Mr Wong See Ngee,  Statistician, Department of Statistics, Ministry of Trade and Industry
• Mr Lem Kok Chan, Research Analyst, Centre for Business Research & Development, Faculty of Business Administration, National University of Singapore

THAILAND

• Ms Pattama Teanravisistsagool, Policy and Plan Analyst, Office of Macroeconomic Policy, National Economic and Social Development Board
• Ms Somsajee Siksamat, Team Executive, MPG, Bank of Thailand

VIET NAM

• Ms Pham Thi Hong Trang, Senior Expert Economist, Industrial Statistics Department, General Statistical Office
• Mr Nguyen Van Doan, Senior Expert Socio-Economic Statistician, Department of Trade and Price Statistics,General Statistical Office.
• Ms Dinh Hien Minh, Researcher, Unit for Policy Analysis and Economic Forecast,Central Institute for Economic Management
• Ms Do Thi Thu Huong, Researcher, Unit for Policy Analysis and Economic Forecast,Central Institute for Economic Management

OBSERVERS

• Mr Manop Udomkerdmongkol, Bank of Thailand
• Ms Ruamporn Sirirattrakul Economic Statistics Division, National Statistical Office
• Ms Montip Sumpunthawong, Policy and Plan Analyst, National Economic and Social Development Board

OECD SECRETARIAT

• Mr Derek Blades,Head, Division for Non-Members, Statistics Directorate
• Mr Ronny Nilsson Administrator, Division for Non-Members, Statistics Directorate
• Mr Olivier Brunet, Statistician, Division for Non-Members, Statistics Directorate

ADB SECRETARIAT

• Mr Bishnu Dev Pant, Senior Statistician, Statistics & Data Systems Division 
• Ms Barbara D. Carreon, Statistics Analyst, Statistics & Data Systems Division

ESCAP SECRETARIAT

• Mr Andrew J. Flatt, Director, Statistics Division
• Mr Loh, Meng Kow Chief, Statistical Information Services, Statistics Division
• Mr Blaise Ehounoubakrohi, Database Administrator, Statistical Information Services Section, Statistics Division
• Ms Selma Guven, Statistician, Statistics Development Section, Statistics Division
• Mr Ilpo Survo, Programme Officer, Statistics Development Section, Statistics Division 
• Mr Roberto Pagan,Associate Statistician, Statistical Information Services Section, Statistics Division
• Mr Joel Jere, Statistician, Statistics Development Section, Statistics Division
• Ms Heidi Arboleda, Regional Adviser on National Accounts, Statistics Development Section, Statistics Division
• Ms Neema Majmudar, Associate Statistician, Statistics Development Section, Statistics Division 
• Mr M. Nuri Ozsever, Adviser on Population Data Processing and Database Management, UNFPA Country Support Team Office for East and South Asia
• Ms Varaphorn Prapatsakdi,Administrative Assistant, Statistics Division

ANNEX 2.  BUSINESS TENDENCY SURVEYS IN ASIA.

Table 1. Business tendency surveys in Asia/Pacific region: Survey characteristics

Table 2.  Progress with Harmonisation of Business Tendency Surveys in Asia/Pacific region