Why did INEGI implement the business cycle clock of Mexico?

1. Why did INEGI implement the business cycle clock of Mexico? Eduardo Sojo Garza-Aldape National Institute of Statistics and Geography, Mexico February 21st, 2011 New York

2. As an element of an overall strategy… • 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.

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

4. 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.

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

6. 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.

7. The Coincident Indicator 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

8. The Leading 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)

9. System of Cyclical Indicators: Coincident and Leading

10. To follow what we consider the best international practices • “Who gets close to a good tree, gets a good shadow”

11. To follow what we consider the best international practices • OECD • Eurostat • Statistics Netherlands

12. Users´ reaction “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.” MacarioSchettino Economic analyst and journalist • “One of the most interesting news that INEGI released this year is called the Business Cycle Clock of Mexico.” • Enrique QuintanaEconomic analyst and journalist

13. Users´ reaction “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 • INEGI´swebsite

14. Why did INEGI implement the business cycle clock of Mexico? Eduardo Sojo Garza-Aldape National Institute of Statistics and Geography, Mexico February 21st, 2011 New York