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EU Explores Non-Traditional Data for Accurate Economic Forecasting

Discover how real-time Google searches and online job ads could revolutionize EU economic forecasting. Challenges and opportunities await as statistical agencies consider alternative data sources.

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1 min read
In the picture we can see a historical building and on it we can see a clock tower with clock on it...
In the picture we can see a historical building and on it we can see a clock tower with clock on it and in front of the building we can see some people are walking on the path and near to it, we can see a road and on it we can see a traffic light to the pole and to the opposite side of the building we can see another building, and with many floors and glasses to it and near it we can see some cars are parked on the road and beside the building we can see a tree and some houses and in the background we can see the sky with clouds.

EU Explores Non-Traditional Data for Accurate Economic Forecasting

Ensuring the availability and consistency of government data is vital for accurate economic forecasting. A recent policy forum at the European Parliament explored the use of non-traditional data sources to enhance government statistics. ETLA's ETLAnow tool, for instance, uses real-time Google search data and official Eurostat data to forecast unemployment levels in EU countries daily.

One challenge lies in maintaining consistency in data gathering and analysis methods across European countries. While Eurostat has agreements with retailers for retail scanner data, accessing similar data from banks and credit card companies proves difficult. To overcome this, government statistical agencies are encouraged to explore public-private partnerships for better and quicker economic data provision.

Analyzing online job advertisements offers insights into the European labor market. However, access to data from employment agencies and professional networks like LinkedIn could provide more accurate matching of job-seeker skills to employer demands. ETLA has successfully used internet search data to forecast immigration to Finland and is now working with a start-up to combine business register and online data for better economic activity insights.

The main European statistical agencies ready to embrace alternative data sources include Eurostat and various national statistical institutes. However, some agencies may hesitate due to concerns about the future availability of private sector data. Despite challenges, the potential of alternative data sources to improve the quality and timeliness of official government economic forecasting data is significant.

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