Economic trend analysis is a methodology useful in determining trends by statistically analyzing data. The technique is very reliable up to a certain point, but has limitations based on availability of data, understanding of the topic and technique and each problems’ predictive horizon. The method’s flexibility and usefulness is incumbent upon sufficient actionable data. Given adequate, structured, information and analysis, economic trend analysis can easily communicate complex trends and forecasts to decision makers. The method is most useful for competitive and national intelligence.
- Allows analysis to extrapolate based on available data
- Can be used for future forecasting or estimation by monitoring indicators and its drivers
- Can be applied to social issues such as sustainability, eco-tech, public spending and health indicators.
- Utilizes big data to extract trends from overwhelming amounts of information
- Able to use both qualitative and quantitative data sources
- Limited by the quality of available data
- Need to understand differences in definitions
- Can be time consuming
- Outcomes can be hard to interpret (especially with bigger data sets)
- Pick a problem or issue to examine
- Decide on specific qualitative and/or quantitative data needed for analysis
- Obtain relevant data
- Input data into an analytic tool such as Excel or STATA
- Configure and analyze results of data using charts, graphs, etc.
- Use forecasting tools within Excel or STATA to gain further insight
Personal Application of Technique:
The class was divided into groups of two and assigned a country. The class identified values for various economic variables for the years 2006 to 2010. After compiling the data the teams made a conclusion on the economic well being of the country and determine if that would affect the stability of the country in the future. Each team provided an analytic confidence based upon the believability of the data.
Each country had different issues with finding data to enter into a uniform database such as availability of data, as well as reliability of data reported to international statistical sources.
Rating: 3.75 out of 5