Transcript European Commission Workshop on Business and Consumer surveys Bi-annual investment survey from a user perspective Malin Andersson and Desislava Rusinova European Central Bank Brussels,13 November 2014

European Commission
Workshop on Business and Consumer
surveys
Bi-annual investment survey from a user perspective
Malin Andersson and Desislava Rusinova
European Central Bank
Brussels,13 November 2014
Rubric
Biannual
investment survey: outline
Outline
• Welcome features and use of the survey
• Stylised facts
• Comparative forecast performance (compared to available
proxies of business investment)
• Cross-check with other surveys such as ECB’s SAFE (Survey
on access to finance for small and medium enterprises)
• Further issues from a user perspective
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Rubric
Advantages
and use of the survey for the outlook on investment
Welcome features of the EC survey:
• Rich detail on a disaggregated level (country, sector, size of
company, combinations between these);
• Relatively long time series for the major countries and
comprehensive coverage, survey started in 1966;
• Long horizon (1 year ahead) compared to other indicators
• Representativeness and large number of participating firms.
• Provides indicators for comparing real developments in small /
large companies without resorting to micro data
Useful aspects of the survey for the short-term outlook on investment:
• Dynamics by country and sector
• Factors influencing investment across time, country, etc.
• Company size
• Type of investment: extension/replacement
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30
2007
2008
2009
2010
2011
2012
2013
Germany and France
ES projections
20
20
10
10
0
0
-10
-10
-20
-30
-40
2014
-20
De projections
-30
FR projections
-40
2007
2008
2009
2010
4
2011
2012
2013
2014
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Italy and Spain
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Rubric facts by country / country groupings
Stylized
• There is large heterogeneity across euro area countries
• During the crisis there was high volatility and large revisions of
investment plans, particularly in the stressed countries
Expected investment growth in selected euro area countries
(percentage changes)
Greece and Portugal
IT projections
30
50
40
GR projections
30
PT projections
20
10
-10
0
-20
-30
-40
-50
2007
2008
2009
2010
2011
2012
2013
2014
Source: European Commission.
www.ecb.europa.eu ©
Rubric facts by country / country groupings
Stylized
• Euro area investment plans for 2014 points to a recovery
Expected business investment growth
for the euro area
(percentage changes)
10
5
0
-5
-10
-15
-20
2005
2006
2007
2008
2009
2010
2011
2012
2013
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2005
Q2 2006
Q4 2006
Q2 2007
Q4 2004
Q2 2005
Q4 2005
Q2 2006
-25
2014
Source: European Commission.
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Rubric facts by sector
Stylized
Euro area: Business investment plans by
sector
(balances)
• Investment plans in the
intermediate and
investment goods sector
show more pronounced
cycles than in the
consumption goods sector.
20
15
10
5
0
-5
-10
• Investment plans in the
investment goods sector are
overall less revised over time
than investment plans in the
consumption goods sector
-15
Durable consumer goods
-20
Investment goods
-25
Non-durable cons goods
-30
Intermediate goods
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2012
Q2 2013
Q4 2013
Q2 2014
-35
2007
2008
2009
2010
2011
2012
2013
2014
Source: Industrial investment survey Apr/May 2014
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Rubric facts by firm size
Stylised
Euro area: Business investment plans by
firm size – patterns and difference in
crisis impact
(percentage change)
• Investment plans for larger
and smaller firms follow
different patterns in recent
years
30
Size<50
Size>250
20
• Larger volatility/revisions for
smaller firms
10
0
• Expectations for small firms
remained overall less
positive in the crisis
-10
-20
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2012
Q2 2013
Q4 2013
Q2 2014
-30
2007
2008
2009
2010
2011
2012
2013
2014
Source: Industrial investment survey Apr/May 2014
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Rubric facts: factors behind investment plans
Stylized
Factors influencing investment
(balances)
50
• Demand was a constraining
factor in 2008-09, but
remained generally
supportive since;
Demand
Financial
Technical
40
Other
• Financial factors have been
perceived as modestly
supportive recently;
30
20
10
• Technical factors appear to
be supportive in general
throughout the period.
0
1998
2001
2004
2007
2010
2013
-10
-20
Source: Industrial investment survey Oct/Nov 2013
Note: More positive numbers correspond to more supportive factors.
””Other” refers to various factors such as the impact of the economic
policy, tax policy relevant for investment and the possibility to replace
investment activities abroad.
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Rubric facts: structure of investment
Stylized
• Recently, the share of
replacement investment is
higher than average while
the shares of extension and
rationalisation investment
are lower;
Structure of investment
(shares)
1.0
0.9
0.8
0.7
0.6
• The decline in
extension/rationalisation
investment is also observed
in the absolute levels;
0.5
0.4
0.3
0.2
0.1
Replacement
Extension
Rationalisation
Other
• Companies see little need to
extend capacities and
concentrate on maintaining
existing ones.
0.0
Source: Industrial investment survey Oct/Nov 2013
Note: More positive numbers correspond to more supportive factors.
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Rubric
Comparison
with investment from macroeconomic projections
• What would be an appropriate equivalent variable to industrial
investment in the macroeconomic projections?
• The European Commission forecast allows deriving a suitable
narrow measure:
o
o
o
o
Private investment for the whole economy in current prices
Converted to constant (2010) prices
Minus investment in dwellings in constant prices
Gives real private nonresidential investment (RPNI)
• At the ECB, private non-residential investment is
estimated/projected in a broadly similar way, by subtracting
government and housing investment from total investment
• However, this breakdown is not published
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Rubric facts: Euro area evidence
Stylized
• There is a relatively good fit between the real private nonresidential investment and investment plans
Euro area: Business investment plans 2005 - 2014 and real private
non-residential investment (Autumn 2014)
(percentage changes)
Projections
Actual RPNI growth
10
5
0
-5
-10
-15
-20
Q4 2005
Q2 2006
Q4 2006
Q2 2007
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2012
Q2 2013
Q4 2013
Q2 2014
2005
2006
2007
2008
2009
2010
2011
2012
2013
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Q4 2004
Q2 2005
Q4 2005
Q2 2006
-25
2014
Sources: European Commission.
.
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Rubric facts: Country evidence
Stylized
• There is a large heterogeneity across euro area countries on the
outlook for 2014
Euro area countries: Business investment plans for 2014, last two
vintages (Q4 2013 and Q2 2014) and RPNI projection for
selected countries (Autumn 2014)
(percentage changes)
20
20
Q413 Oct/Nov
378
15
15
Q214 Mar./Apr.
46
Private investment
projection, autumn 2014
10
68
10
5
5
0
0
-5
-5
-10
-10
-15
-15
EA BE DE EE GR ES
Sources: European Commission.
Note: data for Ireland are not available.
FR
IT
CY LV LU MT NL AT PT
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SI
SK
FI
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Rubric
Comparative
forecast performance – 1
• Correlation of investment plans in volume from the EC survey with
actual growth in PRNI, 1996 – 2013
• Countries : DE, FR, IT, ES, NL, GR, FI, AT, PT
Results:
• The correlation strength varies substantially by country
• For some countries (DE, FR) and the euro area, the spring
assessment of the same year is on average closely correlated with
the final outcome.
Table: Correlation between the survey outcomes and actual outcomes for
business investment
previous year current year
Oct/Nov
Apr/May
overall
28%
49%
Euro area
54%
86%
Germany
60%
79%
Greece
37%
59%
Spain
7%
27%
France
46%
85%
Italy
15%
38%
Netherlands
17%
43%
Portugal
45%
52%
current year
Oct/Nov
47%
84%
83%
41%
14%
92%
36%
50%
65%
Source: European Commission.
Note:The category “Overall” (line 2) refers to the overall panel correlation.
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Rubric
Comparative
forecast performance - 2
• RMSE comparison: EC survey vs. respective vintages of RPNI
forecast (real-time forecast)
• Previous year assessment: Oct/Nov survey vs. Autumn forecast
 The survey can provide orientation on the trends in investment early on;
 In some cases the RMSE of the early survey is lower than the projection;
 Germany: the early survey identified correctly that the recovery in 2010 would
be more subdued than envisaged in the forecast;
• Same- year assessment: Oct/Nov survey vs. Autumn forecast:
 Not surprisingly, the full macroeconomic forecast is on average more precise
 Still, survey results can provide useful indication;
• Since 2011, for some countries (e.g. Germany) the same-year survey
tends to over-predicts investment growth
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Rubric
Comparative
forecast performance - 3
•
Survey results (autumn previous year) vs. PRNI forecast (autumn previous year):
Germany (LHS) and France (RHS)
EC survey
Previuous-year forecast
EC survey
actual
Previuous-year forecast
actual
10
15
10
5
5
0
0
-5
-5
-10
-10
-15
-15
-20
2009
•
2010
2011
2012
2009
2013
2010
2011
2012
2013
Survey results (autumn same year) vs. PRNI forecast (autumn same year): Germany
(LHS) and France (RHS)
EC survey
EC survey
same-year BMPE
actual
same-year BMPE
actual
10
20
5
10
0
0
-5
-10
-10
-15
-20
-20
-30
2009
2010
2011
2012
2013
-25
2009
2010
2011
2012
2013
Source: European Commission.
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Rubric
EC
survey vs. the SAFE
SAFE: ECB Survey on access to finance for small and medium enterprises
SAFE: profits as a factor relevant for
income generation, past six months
(all charts: net percentage of respondents)
60
40
SAFE: external financing needs for
investment purposes
SMEs
45
Large firms
40
35
20
30
25
0
20
-20
15
SMEs
10
-40
Large firms
5
2009
-60
2010
2011
2012
2013
2009 2010 2010 2011 2012 2013
EC survey: demand a s a factor
small firms
EC survey: financial factors
small firms
Large firms
50
30
40
20
30
Large firms
10
20
10
0
0
-10
-10
-20
-20
-30
2000
-30
2000
2003
2006
2009
2012
16
2003
2006
2009
2012
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Rubricmessages and potential policy implications from the survey
Main
• Large heterogeneities between countries,
• >> reflecting structural differences to be addressed by structural
reforms…
• Persistent differences in support by factors between large and small
firms, which seem to be broadly in line with SAFE results;
• >> measures needed to improve access to finance for SMEs…
• Although financial factors improved recently, they remain less
supportive compared to demand and technical factors;
• >> EU wide initiatives to boost investment…
• The structure of investment points at subdued extension and
rationalisation; rather: investment preserves existing capacities;
• >> implications for capital stock and long-term growth potential…
• Survey assessment from the autumn of the previous year already
contains useful information on the expected dynamics of
investment, especially for the large countries.
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Rubric issues from a user perspective
Further
• Values vs. volumes – how exactly are the growth rates in values
corrected for inflation to reach growth in volumes?
• Growth rates of above 100% are hard to interpret/reconcile with
projections and other indicators. Examples: Estonia (regularly),
Greece in 2014. What are the responses of participants in these
cases?
• Details on back data revisions? Impact of ESA2010?
• Future availability of missing countries (IE)?
• Factors influencing investment – it would be most useful if the
question on factors would be included in both Spring and Autumn
vintages:
- Receive up-to-date information about what is constraining
investment in the euro area/countries
- The indications on influencing factors change relatively fast
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Rubric
Thank you for your attention!
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