Foreign PMIs: A reliable indicator for Swiss exports

Sandra Hanslin Grossmann () and Rolf Scheufele

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: Foreign economic activity is a major determinant of export development. This paper presents an indicator for now- and forecasting exports, which is based on survey data that captures foreign economic performance. We construct an indicator by weighting foreign PMIs of Switzerland's main trading partners with their export shares and compare its forecasting performance with alternative indicators. The paper shows that the indicator based on foreign PMIs is strongly correlated with exports (total as well as goods exports). In an out-of-sample forecast comparison we employ standard ARDL models as well as MIDAS models to forecast different definitions of exports. We document that our export indicator outperforms many other previously used indicators for forecasting exports and an univariate benchmark. As manufacturing is an important pillar of the Swiss economy and is highly export intensive, improving export forecasts is also beneficial for forecasting Swiss GDP.

JEL-codes: C53 F14 F17 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-for and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112830

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