Hospitality sector. Stock image
The Department of Enterprise, Tourism and Employment is developing new economic tracking tools to spot patterns and give more “real-time” insights into strain in the consumer-facing hospitality, tourism and retail sectors.
Masses of data ranging from debit card payments to airline seat sales and payroll numbers will be distilled to create a monthly tracking index, the department said.
The data will be combined with official Central Statistics Office retail sales, price and labour market data, to allow officials greater and earlier insights into sectors that remain key employers across the country.
It comes as industry figures have warned that consumer-facing businesses will be under heightened strain next year, as they grapple with rising costs and an uncertain outlook.
The Department of Enterprise said recent years had illustrated the speed with which shocks can translate into stress in these sectors.
“As official statistics are released with inherent lags, evolving conditions may not be fully captured for some time.
“Against this backdrop, there is a strong case for developing diagnostic tools that can provide a more timely read on evolving sectoral pressures and facilitate the in-house monitoring of sectoral stress,” it said.
The basis for the new tracking tools is set out in a paper by Keith Fitzgerald and Dermot P Coates.
“We propose a form of ‘early warning signal’ that captures both the demand and supply-side dynamics for the consumer-facing services sectors. We do so by applying a principal component analysis (or PCA) framework.
“By combining multiple timely indicators into a single composite measure, we can track trends in underlying activity in near real time and flag emerging sectoral downturns that may not present in headline aggregate statistics (which are often produced at a lag),” they said.
Today’s News in 90 Seconds – Tuesday, December 23
The paper presents a trial framework that uses high-frequency economic data to identify the key common patterns across a broad set of indicators looking at both customer demand and business supply factors.
The department said that the indicators are experimental and are not designed to give forecasts or to trigger policy actions.
They are intended to form part of the department’s ongoing analytical work to deepen understanding of real-time economic trends and their impact on key sectors.
source