KOF Leading Indicators

Business confidence indices are a large group of macroeconomic indicators reflecting the current state and future prospects of doing business in the country. Since they provide one of the earliest assessments of the economic conditions, their role as leading indicators is particularly important.

There are many different indices reflecting business conditions and managers' expectations about the future. Current conditions indices are used to understand the current sentiment; expectations indices are used to forecast future prospects. There are also industry indices and service indices, indices of new orders, employment, shipments, prices, etc.

Much of business planning is based on these data. Business confidence data is used to forecast the necessary level of inventory (both raw materials and finished goods), prices, staffing levels, etc.

In general, the necessary budget for the normal functioning of a business is planned on the basis of the business confidence forecast.