Case Study
Development of Forecasting Models and a Quarterly Economic Publication
Year:
2024
Sector:
Economy
Client:
Canadian Federation of Independent Business (CFIB)
The Mandate
Client Need
One of the key strengths of the CFIB Business Barometer™ is its ability to gauge the pulse of SMEs, based on a representative sample of independent businesses across Canada. However, several economic indicators are published with a significant lag. Therefore, CFIB tasked AppEco with developing a set of econometric models to generate forecasts on the state of the economy for inclusion in the Quarterly SME Outlook publication.
Our Work
Our Strategic Approach
We supported the project across four key phases:
In-Depth Analysis
We began by diving deep into the statistical properties of the Business Barometer™ data. This involved crafting weighted indices that account for respondent size, economic sector, and province, as well as pinpointing key economic indicators to forecast.
Building the Perfect Models
Next, we developed the most effective econometric models through a two-step process: first, we selected the best predictive variables using a rigorous subset approach, then we put our models to the test with out-of-sample evaluations to ensure true forecasting accuracy.
Seamless Integration
After fine-tuning the models, we implemented them into automated forecasting routines, ensuring smooth integration into the quarterly publication for timely insights.
Continuous Optimisation
Our work doesn’t stop there. We continue to monitor the performance of our models, regularly benchmarking against other forecasters to ensure they stay ahead of the curve.
The Result
Conclusion
Recommendations and Impact:
CFIB's Mainstreet Quarterly™ draws on the insights from the Business Barometer™, gathered through the Your Business Outlook survey. Unlike many other publicly available economic indicators, which can experience delays of over two months, this data is available the very month it is collected. As a result, CFIB’s forecasts are often ahead of the curve, providing insights into economic performance months before it unfolds.
Rigorous Research by CFIB
Thanks to rigorous research, CFIB now delivers reliable and timely forecasts, powered by data from its members, ensuring they reflect the real-time pulse of Canada's economy.
Easy Integration
By incorporating these forecasts into its quarterly publication, CFIB underscores the value and uniqueness of its Business Barometer™ data, offering valuable insights that help policymakers and the public stay informed about Canada’s economic landscape.
