Statistics which determine Investment

Which Economic Statistics are the Most Significant for Investing in Manufacturing Sector?

my suggestions

• % change real GDP (35%)
• CPI % change (24%) see: impact of inflation
• Real interest rate (21%) impact of interest rates
• CPI trend (5%)
• Budget balance (5%) impact of borrowing
• Deficit trend (2%)
• Public sector debt (5%)
• Public sector debt trend (3%)

Growth is the most important. If you are selling to the domestic market, it is rising incomes which will help increase sales. Without growth, manufacturing firms will struggle.

Inflation is very important and does have a direct bearing on the performance of manufacturing firms. The annual rate is more important than the past trend rate, though often it is the trend rate which influences the current rate.

Real interest rates are very important for manufacturing industries. Though it might be difficult to put it into a model. High rates will reduce growth. But, negative real interest rates can also be damaging to an economy in the long run.

The last 4 are relatively similar. Also, I don’t think they have a direct impact on the performance of manufacturing firms. Nevertheless very high levels of debt are symptomatic of poor economic performance. Note countries like Greece, Italy and Spain have very high levels of national debt (over 100% of GDP)