Enhancing forecasting with primary research
On February 13, 2012 the Wall Street Journal released its annual rankings of economic forecasters. None fared all that well in a relative sense, Tim Gill, director of economic analysis at NEMA placed at the top of this year’s list but the accuracy of his team’s forecast (based on a methodology developed by the federal reserve) would have ranked 35th in the 2011 rankings. A number of unpredictable, or at least unforeseen, events created the delta between the forecasts and the year that was; turmoil in the Middle East, the Fukushima Daiichi nuclear disaster in Japan, and the never ending European debt crisis chief among them.
The rankings highlight the challenges associated with forecasting and echo the opinions expressed in Isurus’ most recent Insights – that forecasting is about identifying trends, predicting their likelihood to occur, and determining what these events would mean for your business. As forecaster Paul Saffo would say – forecasting is not about predicting the future. It is about reducing the uncertainty you face.