Synthetic Indicator of Activity (SIA)
Occasionally we hear of “green shoots” of economic recovery of the country’s GDP but we may not know to what extent it is true or not.
An objective way to know is the Synthetic Indicator of Activity (SIA). This index is compiled by the Ministry of Finance in Spain (and their equivalents in the different countries of the European Union on the need to harmonize data from Eurostat, Statistical Office of the European Union based in Luxembourg) in relation with the aggregate GDP accounting.
It takes into account the acquisition of goods and services in different areas and the level of activity in different sectors. E.g.:
– Sales in certain large companies.
– Apparent cement consumption.
– Non-energy imports.
– Electricity consumption.
– Industrial production index.
– Entry of tourists.
– Rail transport of goods and passengers.
– Air passenger traffic.
– Social Security members not agricultural.
– Loans to businesses and families.
Whenever it is necessary, the indicator is deflated by the HICP to remove the effect of inflation without food and energy. It becames more accurate.
As was mentioned above, the calculation method is harmonized across Europe and can see the evolution of GDP to 3 months ahead with some certainty. Interesting to provide for investment decisions, debt repayment, etc.
As an example, for consultation can be accessed: www.meh.es
The author provides historical data records of the evolution of SIA and Spanish GDP since 2001 with each quarter. Their correlation is high and is a good indicator to see the cycle change quickly.