Using the NFPA Toolkit, you can easily create an analysis showing the turning points and economic cycles much like ITR Economics does in their quarterly forecasts.
The 3/12 and 12/12 rates of change calculations are used by ITR Economics in their reports. These rates of change allow ITR Economics to decipher where different industries are in the business cycle and where the turning points are. Applying these calculations to your own company’s data is not a complicated feat!
To calculate the 3/12 and 12/12 rates of change using Excel, ITR Economics has a video explaining the process and how to interpret the data at this link: https://www.youtube.com/watch?v=6m-zS-WgvwI. The economist in the video, Lauren Saidel-Baker, will be featured in NFPA’s Fall 2024 Webinar.
If you have access to the NFPA Toolkit, uploading your own company’s data and using the Market Trends Report builder will result in fast, confidential, and fully detailed reports. For example, using the Confidential Shipment Statistic Program’s Total Industrial Hydraulic Shipment Indexes, you can see the 3/12 and 12/12 rates of change graphed below. The latest data points for June 2024 are recorded at -9.0% and -2.8% respectively. Typically, the 3/12 leads the 12/12 by approximately three to six months. Both lines falling below 0 and continuing to decrease reflect a period of declining shipments and are defined by ITR Economics as a recession. The report builder calculates all data points into excel downloadable files for your team’s use. Additionally, the report builder correlates the two series used in the example report at 76%.
For any questions regarding accessing and using the Toolkit, accessing the Confidential Shipment Statistic Program data shown in the graph, using Excel to calculate your company’s business cycle, and accessing the ITR Economics quarterly forecast report, please reach out to Cecilia Bart at cbart@nfpa.com.
Request a login for the Toolkit here: https://www.nfpa.com/toolkit/Utility-Nav/Register.htm
Check out the latest fluid power forecast report from ITR Economics here: https://nfpahub.com/q2-2024-itr-forecast-report-now-available/
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