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Business tendency surveys - University of Management and Administration in Zamosc
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University of Management and Administration in Zamosc
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Business tendency surveys

Business tendency surveys are also known as economic opinion surveys or business climate surveys. Generally they focused on the conclusions about economic activity, based on the results of business leaders forecasts concerning their current positions on the market, plans and expectations in the nearest future.

In comparison to the traditional approach which usually regards only one type of variables or one aspect of business activities, the business tendency surveys gather a board spectrum of information to ensure  comprehensive analysis of the whole economy or its chosen sector.

The experiences of OECD countries show that these types of research can be very useful both for the respondents, as well as policy makers and economic analysts. Although these studies don’t provide precise information regarding the volume of production, sales, investment and employment, they can be a tool for forecasting changes  of all   these aggregates and particularly useful for the analysis of business cycles.

Business tendency surveys were carried out in order to obtain the quality  information, used to monitor the current economic situation and short-term forecasting. The research carried out up to now show that the information derived from these studies are particularly useful for forecasting turning points in business cycles.

Information collected during the economic opinion surveys is known as qualitative, because respondents are asked to provide a qualitative assessment rather than the value of a variable.

For people who  forecast it  is usually easier to indicate a qualitative information rather than quantitative information because the first one doesn’t require from a head of unit to check precisely reports and  balances of the company.

Consequently, surveys can be carried out very quickly and their results are published much faster than  results of traditional statistical surveys. That is one of the main advantage of qualitative research.

Respondents are the main recipient group of the economic tests. The aggregated and grouped data give them information about the condition of their own sector seen by competitors, as well as information about current and projected situation of suppliers and customers.

Economic analysts benefit from research results, as that information is obtained very quickly and may constitute preemptive variables (warning variables) of aggregated indicators of economic activity changes.

In the project: ‘Unemployment prevention system in underdeveloped urban areas’ were carried out the economic surveys of small and medium-sized enterprises in the region of Lubelskie and Podkarpackie Voivodeship. Data obtained during forecasts are processed in order to receive quarterly diagnostic and prognostic economic barometers of small and medium-sized enterprises – separately for each province.

In addition to information about current and projected economic cycle in both provinces the barometers serve as models for forecasting the variables, which explain the basic macro-economic categories in this particular situation on the labour market as well as models of the threat of bankruptcy in the two provinces.

‘Unemployment prevention system in underdeveloped areas’


The main objective of the project ‘Unemployment prevention system in underdeveloped areas’ was supporting state employment policy and an implementation of innovative tools and actions at weakly developed Polish regions (Lubelskie and Podkarpackie provinces).

The assumption for the objective was to develop and launch  a complex system of support for SMEs (Small and Medium Enterprises) sector. Such a complex system is meant to enable employers and employees to root out successfully potential dangers (that might cause grave dysfunctions) and  lead to reducing the rate of unemployment in SMEs sector.

It is necessary to adopt an unconventional approach to achieve the goals effectively and to solve the problem of labour market. The general idea of this approach was to give up an after-effect tactic in favour of  an advanced method which would prevent unemployment.


E-barometer is a fundamental tool of the presented system. It is an internet tool (internet portal) providing all enterprises involved in the project  with an access to information about macro, meso and microeconomic threats. After logging in and entering proper financial records, each interested participant of the project was able to obtain:

a) macroeconomic level forecast (available as quarterly reports)

b) mesoeconomic level forecast worked out in the form of:

  • barometer of economic sentiment (quarterly reports)
  • forecast about economic situation of consumers (half-yearly reports)
  • forecast about labour market (half-yearly reports)

c) microeconomic level forecast based on:

  • benchmarking system (information on what a given enterprise economic condition is in comparison with other enterprises operating in the sector)
  • danger estimator (forecast about specific economic situation of the company based on economic and financial records entered into the system)


The aim of macroeconomic analysis both at internal market level and the most important variables at global market level (including the EU market in particular) is to construct a ‘background’ for regional analysis encompassing two aspects:

  • help for regional enterprises operating outside local market
  • as a point of reference for regional tendencies

Macroeconomic analyses were conducted by using a complex database concerning Poland (data acquired from Central Statistical Office (CSO), National Bank of Poland and Ministry of Finance) and external environment (from Eurostat).  The study  also used extensively estimative techniques to estimate numbers provided by CSO with delay or based only on annual calculations (e.g., people’s income at disposal, total number of the employed). The project was going to use a forecast tool called a quarterly macroeconomic model, which in its extended version  also covered some variables relating to regional economy.

Macroeconomic analysis and forecasts will include the following variables:

  • GDP and population’s income;
  • industrial production, building and assembly production, trade reports, transport, finances of companies;
  • currency exchange rate;
  • inflation;
  • monetary policy;
  • budget;
  • balance of payments;
  • world economy description;
  • raw material prices on world markets;

The analysis  provided tendency description for the previous quarter in particular sectors and how the sectors correlate (e.g. influence of prices on population’s income or the way balance of payments and budget situation affect currencies). There were quarterly-based forecasts for 6-9 quarters (extending the range by one year in the mid-calendar year). The forecast included the principles of egzogenic factors and crucial risks affecting forecast accuracy. The results were presented in reports showing economic analyses and forecasts for Poland on both state and local levels (Lubelskie and Podkarpackie provinces) and the extent to which international factors interfere.


Economic sentiment analysis in Lubelskie and Podkarpackie provinces

Economic sentiment research in Lubelskie and Podkarpackie provinces was based on the Business Condition Survey method.  Basic information source providing business sentiment data within Lubelskie and Podkarpackie provinces were surveys carried out once every quarter. Economic sentiment research was carried out in five economic sectors: industry, building and construction, trade, services and households. Every quarter 650 small and medium enterprises were asked to participate in the survey. The objective of the test was to determine the current economic activeness in contrast with the previous periods. The aim was also to determine probable line of changes to take place in the time to come – up to 3-month forecast. This business condition test method has  been resulted in getting a synthetic evaluation picture of economic situation – in this particular case the economic sentiment of small and medium enterprises.

Analysis of consumer economic situation in Podkarpackie and Lubelskie regions

The goal here was to determine present situation  and make a forecast for the local district market conditions, with extra accent on demand, the lack of which is preventing enterprises from effective business activities  in both regions.

Evaluation of economic situation in local districts was an accumulation of estimates on demand, level of competition, quality of labour market and attraction of the region for settlement. The results of evaluation  made employer’s decision easier (in the scope of  starting their economic activeness on given local market). The research was based on reliable data acquired from both the Regional Data Bank of CSO and reports of home finances. The analysis surveys of households were also carried out to complement the statistical analysis.

The results of the research were used  to make a synthetic evaluation of the economic situation in local districts. To achieve that, an indicator of general business activity was developed, which corresponded directly to the indicator applied in the regional barometer of enterprise economics. This, in turn, allowed to compare economic situation in a district with that in a region. Accumulated data (1996-2004)  served as the basis for making a forecast attempt of an economic situation in districts with the use of econometric modelling methods.

Research and analyses of labour markets in Podkarpackie and Lubelskie regions

The aim was to reveal tendencies and dangers for labour markets within Podkarpackie and Lubelskie regions. The analyses were based on the data obtained from two sources: from Gazeta Wyborcza job adverts and CSO data. By analysing job adverts it was possible to construct ahead indicators for economic situation of labour market, which in turn allowed 3 month forecasting. Statistical and econometric analysis of the data coming from CSO  provided relevant information about labour markets in Podkarpackie and Lubelskie regions with an emphasis on a cross section of trade and geography. This has been accompanied with a short-term forecast.

Using leading indicators to prepare forecasts about regional economic situation

The goal of the analysis was to use forecasting barometers as leading indicators and make short-term (maximum one year) forecasts about basic social and economic categories in  Podkarpackie and Lubelskie provinces. National Bureau of Economic Research conceptual leading indicators have developed the forecasts. Due to close observation and in-depth research of ahead indicators it was possible to take actions to prevent economic activeness from decreasing.


Primary elements of e-barometer at microeconomic level concern two basic issues:

  • developing a model (benchmark) of top small enterprises in particular sectors for Lubelskie and Podkarpackie provinces;
  • developing prognostic models to enable forecasting of future economic and financial standings of  enterprises.


Benchmarking system enabled employers to compare their economic and financial standings with average standings estimated in the sector they are operating. The system included a number of indicators developed from data provided by statistical offices. These indicators were  average values of financial and economic condition and other most crucial items. Specific values were coming from balance sheet and profit and loss account obtained from enterprises. These average values were determined in a two-fold manner: as absolute average values and as average values of indicators change rate and financial figures in the future periods. Another element of the system were average values prepared (in similar way) for 20% of the top enterprises in each sector.

Forecasting  financial and economic condition of companies

The concrete definition of financial and economic condition (standing) of an enterprise has not been defined precisely yet. The result of previous analyses was a definition of the enterprise in bad financial and economic condition (when there is a serious threat to its further economic activeness).  In such a case all 3 reliable indicators take place:

  1. Gross loss (below zero)
  2. Sales decline (rate value below zero)
  3. Decline in employment (rate value below zero)

If at least one of these conditions was not fulfilled (e.g. enterprise presented gross benefit, sales increase, employment increase or value of whichever of indicators equalled  zero) it was  founded that financial and economic condition of a given enterprise was as good as there was no risk for its further economic activeness and such a enterprise was not threaten by bankruptcy.

With a view to the fact that actually it is difficult to  find any method of forecasting using variables as the only best one,  under this research the attempt was made of using a set of potential dependent variables to develop models of forecasting based on following methods:

–       Logit models

–       Discrimination functions

–       Neural networks

–       Bayesian Networks

–       Decision trees

–       Rough sets

Every method mentioned above enables financial and economic condition forecasting (together with determining  the probability of good condition). On the other hand for every model an accuracy indicator is calculated (matching with data) . These  calculations make it possible to develop specific synthetic forecasting model in which results of forecasting obtained from individual method are weighted by accuracy indicators from partial forecasting models.

Useful input data was based on reliable information obtained from Regional Statistical Offices in Lublin and Rzeszów. There were 32 types of financial indicators prepared using values from the enterprises’ financial reports (e.g. balance sheet and profit and loss account). Main groups of indicators include:

  • profitability indicators
  • liquidity indicators
  • debt indicators
  • performance indicators
  • employment indicators

The advantage of using specific statistical models is that they make it possible to evaluate parameters which in turn helps use them not only for forecasting aims but also for  analysis of  bankruptcy reasons. Other used research models concentrated on financial and economic data provided by 210 enterprises participating in the project. Useful data were collected during evaluation processes in companies.


  1. M. Kowerski, Influence of Idiosyncratic and Macroeconomic Factors on Consumer Economic Sentiment of Lubelskie Region (Poland), w: Work and Materials IRG SGH No 79, 2008
  1. M. Kowerski, D. Długosz, J. Bielak, Variable selection with Stata. The case of assessment of the economic condition of small enterprises with logit micro-macro models, First Polish Stata Users Group Meeting, University of Warsaw, 29 .03. 2008
  2. J. Andreasik, Enterprise Ontology – Diagnostic Approach Conference on Human System Interaction, HSI08, The University of Information Technology in Rzeszów, IEEE Industrial Electronics Society, Kraków, 25 – 27 .05. 2008
  3. M. Kowerski,  Assessment of the economic condition of small enterprises with logit micro – macro models, Conference on Human System Interaction, HSI08, The University of Information Technology in Rzeszów, IEEE Industrial Electronics Society, Kraków, 25 – 27 .05.2008



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