On the possibilities of using consumer surveys in short-term demand forecasting

Introduction

Private consumption accounts for nearly half of total demand in the national economy. Domestic trade constitutes a significant share of private consumption. Trade organisations, the government, and several other parties are interested in forecasting how the volume of trade will develop and how it will be distributed.

In Finland there is a fairly long series of studies in which the volume of trade and commodity-specific demand have been analysed and forecast from time series, primarily in the form of so-called consumption expenditure shares. (See, among others, Viren, 1983; Rahiala, 1984; Laurila, 1985; and Mankinen, 1988.)

Although time-series forecasts are in principle prepared for quite a short time horizon (1–5 years), trade organisations have had a need to shorten the forecast period even further. The greatest need is for forecasting the sales of durable and semi-durable goods, as sales fluctuations are clearly larger in these categories than in, for example, daily goods trade.

One alternative for shortening the forecast period is to make direct use of information gathered from consumers. There is a long international tradition of making use of consumer sentiment data, but in Finland this method has not been widely used. Statistics Finland’s Consumer Barometer may offer new possibilities for extending the forecasting system in this direction. (AI translation)

• ISSN: 0358-5980
• ISBN: 951-9282-07-6