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Down to business: Which QSBO measures are the best at forecasting?

Hamish Fitchett, Finn Robinson

We investigate which measures from the Quarterly Survey of Business Opinion (QSBO) are best at forecasting macroeconomic variables in New Zealand over the past decade.

We find firms’ expectations of future profitability and their reported trading activity perform well when forecasting employment and GDP growth. None of the QSBO variables analysed could reliably improve on the forecasts for CPI inflation from a simple benchmark model.