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Business Cycles

The Business Cycle Tracer is a graphical method used for presentation of the economic and industrial state. The business cycle is based on the tendency survey of the businesses of manufacturing, construction, service and retail trade, conducted by Statistics Denmark.

Introduction

Contrary to a traditional graphical representation of the economic cycle on a timeline (see the tendency survey for the manufacturing industry)

business cycleThe data in a business cycle have been traced in a system of coordinates defined by the four economic stages; increase above trend, decrease above trend, decrease below trend and increase below trend. The four stages are also called; boom, downswing, recession and upswing, but these terms are normally used in a wider connection including more indicators e.g. BNP and unemployment.

The value of the market trends, which is indicated by the vertical y-axis, is a compound economic indicator similar to Confidence indicators of the tendency surveys for the manufacturing, construction, service and retail trade. Here it is calculated using a statistical method, principal component-analysis, which focuses on the total information of the original basic indicators. The horizontal x-axis indicates the change in the value of the market trends by month and can be interpreted as the speed of the market trend development.

The visual course enables one to compare a current economic cycle with earlier economic cycles, in regard to how fast the change occurs and the size of the fluctuations compared to underlying trends. The course is subject to a certain degree of uncertainty especially when looking at the latest month’s development, which is continuously revised, but overall, the results are sturdy.

The economic cycle is a graphical presentation of the market trend development created by a method similar to what is used by the EU commission (DG ECFIN). The interactive presentation tool has been provided by Statistics Netherlands.

Documentation

Documentation of statistics

Get an overview of the purpose, content and quality of the statistics. Here you can find information on the sources that the statistics are derived from, what the statistics contains and how often it is published.

Key Figures

Press the play button, located below, in the interactive graph.

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Instructions
The development of the economic cycle over time is shown by pressing the ”play-button” below the graph. The individual industries can be selected/deselected in the box by each name. In order to show the course of the indicators, the “track-button” of each industry must be pressed. The length of the track can be defined under “settings”, where, for example, 5 years is chosen under “track length”.

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