1) Anticipatory surveys involve surveying businesses, consumers, and government about their future spending plans to forecast economic activity. 2) The indicator approach uses leading, coincidental, and lagging economic indicators like unemployment claims, production, and inventories to predict how the economy will perform. 3) Econometric modeling applies statistical and mathematical techniques to specify precise relationships between economic variables in formal equations to forecast the economy.

1. ECONOMY ANALYSIS
Forecasting Techniques

2. FORECASTING TECHNIQUES
Anticipatory Surveys
Indicator Approach
Econometric Model Building
Opportunistic Model Building
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3. Anticipatory Surveys
Much of the activities in government, business, trade and industry are planned in advance
and stated in the form of budgets. Consumers also plan for their major spending in advance.
To the extant that institutions and people plan and budget for expenditures in advance ,
surveys of their intentions can provide valuable input to short-term economic forecasting.
Anticipatory Surveys are the surveys are the surveys of intentions of people in
government, business, trade and industry regarding their construction activities, plant and
machinery expenditures, level of inventory, etc., such surveys may also include the future
plans of consumers with regard to their spending on durables and non-durables. Based on
the results of these surveys, the analyst can form his own forecast of the future state of the
economy.

4. Indicator Approach
In this approach to economic forecasting, various types of indicators are
studied to find out how the economy is likely to perform in the future. These
indicators are time series data of certain economic variables. The indicators
are classified into leading, coincidental and lagging indicators
Leading Indicators :
• Average weekly hours of
manufacturing production
workers
• Average weekly initial
unemployment claims
• Contract and orders for plant
and machinery
Coincidental Indicators:
• Employees on non-agricultural
pay rolls
• Personal income less transfer
payments
• Index of industrial production
• Manufacturing and trade sales
Lagging Indicators:
• Ratio of manufacturing
and trade inventories to
sales
• Average duration of
unemployment
• Commercial and industrial
loans outstanding.

5. Econometric Model Building
This is the most precise and scientific of the different forecasting techniques.
This technique make use of Econometric, Which is a discipline that applies
mathematical and statistical techniques theory.
In the economic field we find complex interrelationships between the
different economic variables. The precise relationships the dependent and
independent variables are specified in a formal mathematical manner in the
form of equations.
Econometrics : Is the application of statistical methods to economic data and is described as the branch of
economics that aims to give empirical content to economic relations.

6. Opportunistic Model Building
This is one of the most widely used forecasting techniques. It is also known
as GNP model building or sectoral analysis.
This initial estimate takes into consideration the prevailing economic
environment such as the existing tax rates, interest rates, rate of inflation and
other economic and fiscal policies of the government.