RT @OECD: "People should be at the centre of policies" - #ChampionMayors commit to #Seoul Implementation Agenda https://t.co/7OUNmAZCON (PD…
21/10/2017 12:49 AM
@GaneshAhirao You are right - courage to confront the doomsayers is key.
21/10/2017 12:46 AM
@GaneshAhirao @NZMorningReport Worries always overblown - take currency range over past year last days = nothing si… https://t.co/7SOCTB8oMR
21/10/2017 12:44 AM
RT @stujanderson: Amazing how few understand this. Nothing suddenly happened to supply 20 yrs ago - but lenders did start dishing out 7 x e…
16/10/2017 11:04 PM
RT @spexyone: Are you of a certain age ? https://t.co/lVlkwuH5jD
16/10/2017 9:22 AM
RT @paulkrugman: Zombie ideas are claims that have been proved false but just keep shambling along. GOP tax plans are totally infested. A p…
16/10/2017 9:09 AM
RT @HarvardBiz: Understanding the science of innovation could make all the difference in your ability to compete https://t.co/3r21BXPJKE
16/10/2017 8:58 AM
https://t.co/iO6E5xPqQZ
16/10/2017 8:48 AM
RT @TheMFGnetwork: Event Reminder 16/10 @bernardchickey workshop: Connection between Govt economic policies& manufacturers’ bottom line htt…
14/10/2017 8:18 AM
RT @Adherium: Scott Fleming, Sr. Vice President at @Adherium accepting the award for Best Implementation of Digital Healthcare at the OBN A…
14/10/2017 8:18 AM
Recent Post Comments
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.

Print-friendly
12
JUL 13

Lies, damn lies and surveys.




I recently had an email from member asking about all the claimed positivity that has been reported in the manufacturing sector, specifically by the PMI.

Here is the conversation:

Hi John,

Just give me a reality check here please!

As I understand it, the number is a relative measure, not an absolute one? So when the index shows “the biggest expansion in five years” this could in fact be off a base that is lower than some or any previous base?

I’m getting a bit tetchy about people telling me how great things are in manufacturing (the PM said so)!

Allen

--------------------------------

Hi Allen,

It depends on who and what you ask. The PMI has “how do you feel now vs. then” type questions, so is relative within the firm and like all surveys is subject to sample bias. And then it depends on what you want the numbers to say: last month our confidence measure jumped a good deal but looking a bit closer the biggest group was “no change” so the optimists (that had not changed much) stood out but really not much had changed so if the numbers don’t support the feeling we don’t emphasise the numbers – then again if you were an optimist or a pessimist last month and this month is the same do you tick what you were again or the no change box – it’s all a bit imprecise which is why we try to talk about trends, not one month’s numbers.

Back in the day when we supplied our data to Business NZ as part of the process their sampling was very inconsistent in other regions and from the CECC in Canterbury. The biggest expansion is a comment on how much the numbers move and would be accurate, but the question is what does that movement really mean, without sales data they are hard to calibrate and often with sales data the relative numbers don’t correlate with sales or employment. We tend to focus on sales and employment as hard numbers.

Yes the “who do you talk to” and “you should get out more” are comments we have made several times, BNZ positive comment in their release on the PMI has the phrase “manufacturing (who some claim are in crisis)” – and then goes on to hedge that comment. We all know bank economists work for their employers interests. All pretty dismal.

I think you are doing well to restrain yourself at “tetchy” on the agitation scale. Domestically focused manufacturer, particularly the construction sector (the manufacturers John McDermott said are captured in the RBNZ model of our economy) are good from volume and isolation from exchange rate issues perspective, so their feelings are being used to swamp the issues for manufacturing exporters. So we just have keep saying so; maybe someone will listen before it’s to late..

John


tags: manufacturing, pmi, survey, data, exports
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.