Business tendency surveys and macroeconomic fluctuations

This paper investigates the information content of a large sectoral mixed-frequency business tendency survey for Switzerland relative to competing early available monthly information. Using a factor-augmented regression framework, we find that a broad set of dimensions of the survey provides additional information for explaining CPI inflation, employment growth and the output gap. However, the survey contains no additional information for GDP growth. A pseudo out-of-sample forecasting exercise suggests that the survey information is particularly useful for forecasting the medium-term CPI inflation.