The DNB business cycle indicator, which was recently revised, is designed for timely identification of Dutch business cycle turning points. It consists of two series: the realization of the business cycle and the development anticipated for the near future. The realization of the business cycle is based on current industrial production figures. Its international orientation renders the Dutch industrial sector important as a measure of the Dutch business cycle, which is largely determined by the international environment. The previous turning point in the business cycle set in during the third quarter of 2009, starting an upturn which lasted through June 2011 (the most recent month for which industrial production statistics are available; see grey line in chart).
New DNB business cycle indicator foresees turning point in Dutch business cycle
|Date||2 September 2011|
Covering the period up to and including January 2012, DNB’s most recent business cycle indicator foresees a turning point in the Dutch business cycle in the short term, which will mark the start of a cool-down period.
The indicator of the future business cycle looks up to seven months ahead of the 'realization' of the business cycle. It is composed on the basis of consumer and producer surveys, financial data and exports indicators. This present leading indicator, which proceeds from economic data up to and including July, predicts that the Dutch business cycle is about to enter a cooldown period (see blue line in chart). The turning point is expected to be reached in September, a month earlier than signalled by the previous new business cycle indicator. The expectation that the business cycle upturn will soon come to an end is in line with the recent downswing projected by several economic indicators. The expected activity among producers, for example, has declined and the prospects for the Dutch exports sector have deteriorated.
The DNB business cycle indicator was recently revised. The realization series, for example, was reduced to one indicator, i.e. industrial production, and the leading indicator was recompiled (see article in Economisch Statistische Berichten of 2 September 2011, no. 96-4617 for details). The changes were introduced to enable earlier projections of business cycle turning points. The new DNB business cycle indicator appears monthly on DNB’s website under the heading 'Business cycle indicator'.