Stats Fact of the Week: Week of June 10, 2019
Timing and accuracy of industry and economic data resources is important when conducting any type of analysis. So, when government agencies and economic firms release new resources that present aged data or rely on older data sources to deliver their results, it’s natural to question the results’ validity. How can data from one, two, or even three years ago help me examine today’s business conditions?
A great example of this in the fluid power industry is the U.S. Census Bureau’s Annual Survey of Manufacturers (ASM), which is the U.S. federal government’s official annual measure of American manufacturing and the economy. It is one of the largest and most detailed annual data surveys conducted, requesting data from over 50 thousand manufacturers, including large and medium companies representing all U.S. industries. As you can imagine, data collection, verification, analysis, organization and delivery are going to take some time, which explains why the data in this report can be anywhere from one to two years old. It is also the main data source for NFPA’s Annual Survey of Fluid Power Manufacturers (FPASM), an annual report we create based on the Census Bureau report that includes market and product-level shipment dollar data for the U.S. fluid power industry. It is an indispensable tool for determining market size, share, and segmentation.
But again, how helpful can data that is a year or older be? In the example above, the report is the most representative data source for U.S. manufacturing across many industries, including fluid power. This makes it an extremely solid baseline to work from, and from this baseline we can develop a very accurate estimation for that industry in the current time period. For example, combining the year-to-date percent change of industry shipments for 2017, 2018, and 2019 from NFPA’s Confidential Shipment Statistics program with the latest 2016 industry shipments data identified in NFPA’s Annual Survey of Fluid Power Manufacturers (FPASM) will give you a very strong estimate for the market size in the current year.
So, the example above shows us that newly released resources containing data from year(s) ago can still play an important role in understanding our industry today, especially when it is combined with more recent analysis to provide a more current look.