46. Cross-checking the Now (december 2017)
The current study uses two complementary approaches to formally assess the leading content of selected industrial indicators for GDP growth in Slovakia and Germany. In particular, four frequently monitored indicators on industry (new orders, industrial production, manufacturing production, and industrial turnover) are tested for leading properties for their respective economies, using pairwise Granger causality tests and VAR-based impulse response functions. The analysis concludes industrial new orders to be the top performer in Germany, and sales in industry to have the strongest formal leading content in Slovakia. These results are robust across both empirical methods, and the latter finding nicely validates the variable selection in our short-term forecast model MRKVA. Interestingly, German new orders seem to also lead the Slovak economy, albeit to a much less pronounced extent than its domestic economy. These conclusions shed additional light on the quality and properties of high-frequency data we regularly monitor, and in that way improve the efficacy of our forecast monitoring framework.