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Top Questions

How is ECRI's approach different from that of other forecasters?

Our century-long tradition of business cycle research is informed by the fundamental drivers of economic cycles. We are not economists, and do not rely on back-fitted econometric models. While we do not make “market calls,” our exemplary real-time record of calling cycle turning points in economic growth and inflation has helped our clients consistently outperform their peers.  

In contrast, most economists rely on models that try to predict the near future based on what has happened in the recent past. This can work for a while – until the critical moment when a turning point approaches and such models reliably fail. This is because extrapolating from the recent past is a sure-fire recipe for being surprised by the next turn.

Furthermore, our solid grasp of where we are in any given cycle let’s us strip out the cyclical component, leaving behind what is structural. This provides us with timely insights into structural changes.

Learn more about the ECRI approach.

Why does ECRI's approach work?

Our forecasts diverge from the consensus at the right time, which is why we have an unrivaled track-record of making accurate turning point calls in economic growth and inflation worldwide. Our forecasting process is based on our robust leading indicator approach, which employs more than 100 leading indexes, and is not based on regressions or correlations.

ECRI is independent, objective and non-partisan: we are not tied, funded, supported or in any way beholden to a cause other than serving our clients with accurate and reliable intelligence for managing cycle risk.

How can ECRI help me manage risk?

Cyclical risk rises and falls over the course of the business cycle. Through our work, our clients watch these directional shifts develop, and are able to better time critical decisions – including asset allocation, business management and, in some cases, government policy.

See examples of client experiences.

Investment Managers:
•    Global Investment Manager
•    International Commodity Trading

Business Executives:
•    Global Semiconductor Manufacturer
•    Global Theme Parks

Government Policymakers:
•    The Federal Reserve Circa 1990s
•    The Reserve Bank of India

I have a specific sector interest. Can ECRI still help me?

Yes. We work with clients to determine if their area of interest is indeed cyclical and, if so, how best to monitor and anticipate upcoming turning points. In some cases, our sector-specific leading indexes may be appropriate and, in some instances, where the client is a market leader in their sector, we develop leading indexes specific to their business.

Learn more about how we monitor business cycles.

What is ECRI's track record?

Our track record in forecasting cycle turning points has been unparalleled for decades. The Economist magazine noted that: "ECRI is perhaps the only organisation to give advance warning of each of the past three recessions."
See our real-time track record from 2015-present.

What does ECRI do?

ECRI helps clients manage their exposure to cycle risk. We have been studying economic cycles – and forecasting recessions and recoveries – longer and more reliably than anyone, anywhere. We do this by making sense of the often-confusing big picture through unique cyclical insights based on more than 100 proprietary indexes that we have developed, covering 22 countries.

ECRI leading indexes turn before the economy does, allowing us to see the signs of economic cycle inflection points well before the consensus. We closely monitor our large array of proprietary cyclical indexes, and provide written reports and consultation to clients, delivering in-depth, nuanced analyses of shifting risk in economic growth and inflation worldwide.

Can I get a free trial?

Our current outlook is available exclusively to clients. The forward-looking nature of our work means that if we make a turning point call now, you most likely wouldn't see the forecast come to pass in short order.

For those who qualify we can set up an introduction to our work with ECRI Co-founder Lakshman Achuthan. He can discuss the methodology and application, and walk through some of our historical and more recent calls.

Contact us for details.

When is the next recession?

The IMF did a 63-country study about recession forecasting. And the punchline was that: “the record of failure to predict recessions is virtually unblemished.” So when someone says we’re mid-cycle or late-cycle it implies that they know when the next recession will begin, which is highly improbable.

But the IMF has also said that ECRI has had a very stellar record making bold calls against the conventional wisdom.

Background & Methodology

How does ECRI forecast turning points in the economy?

ECRI forecasts originate from our objective leading indexes of the business cycle. That’s because they have solid foundations, informed by the fundamental drivers of economic cycles, and have proven their worth over more than a century of economic cycles in the U.S. and in many other market-oriented economies.

Learn more about monitoring business cycles today.

Read excerpts from Beating the Business Cycle, by ECRI's co-founders.

What is the difference between business cycles, growth rate cycles, and inflation cycles?

Business cycles consist of the alternating periods of expansion and contraction in the level of economic activity experienced by market-oriented economies.

Even during periods when such economies do not exhibit business cycle contractions, an economy will exhibit growth rate cycles – alternating periods of upswings and downswings in the economy’s rate of growth.

Inflation cycles consist of alternating periods of rising and falling inflation. Inflation cycle downturns have a degree of correspondence with economic slowdowns, but sometimes begin before, rather than after, the start of a slowdown.

What is a composite index?

A composite index allows a wide range of data to be summarized without using an econometric model.

What is the difference between the leading, coincident, and lagging indexes?

An essential component of our institutional knowledge is our ability to identify leading, coincident, and lagging indicators of the business cycle.
Leading indicators consistently turn before the economy does.

Coincident indicators turn in step with the economy and track the business cycle’s progress.

Lagging indicators turn after the economy turns, and play a confirmatory role.

What are the components of ECRI's leading indexes?

The components of ECRI's composite indexes are proprietary, but through our reports and private meetings our clients are fully apprised of the “story” behind all of our cycle turning point calls. We also work directly with them to customize the integration of cycle risk management into their existing processes.

Is your China data any good?

Yes. We have established cycle chronologies for China and have been monitoring their cycles since last century. In fact, our array of specialized leading indexes for China avoid many data quality issues that plague most observers, allowing us to make bold calls regarding China’s cycles and policy responses.

Is your data revised?

Yes, to the extent some government data is revised.

However, the bottom line is that these routine revisions don't have a material impact on turning point timing forecasts, which is their primary purpose.

How does ECRI compare to the Conference Board LEI?

ECRI's founder, the late Geoffrey Moore, developed the original Leading Economic Index (LEI) almost half a century ago. This short excerpt from Beating the Business Cycle discuss the development of the original LEI. Check out the chart, originally published in The Wall Street Journal in April 2001, and please be sure to read the fine print below the chart.
The Economist also reported on the LEI's and ECRI's track records back in 2005, demonstrating that ECRI outperformed.
Of course, the proof is in the pudding. Please compare the following real-time April 2009 forecasts: ECRI "End of Recession this Summer" Vs. Conference Board “There’s no reason to think that this recession is going to end any time this spring or this summer.”

How does ECRI compare to the Austrian School?

The roots of our research tradition start well before the origins of the Austrian school and, indeed, predate the creation of the Federal Reserve. More than a century before the Fed came into being, there were clear business cycles in the U.S. economy, which cannot therefore be explained by the Austrian theory implicating central bank policies in the generation of booms and busts. In fact, half of the U.S. recessions that occurred between the late 1700s and the early 1900s turned into depressions without any help from a central bank.

Because credit is indeed a key driver of business cycles, our analytical framework subsumes credit cycles but extends well beyond such incomplete explanations to include other critical business cycle drivers that were in evidence before the creation of the Fed and indeed in many subsequent business cycles.

We appreciate the relevance of the Austrian theory to the current business cycle in view of the Fed’s actions following the 2001 recession, as well as its latest policies. But, as mentioned, this is included in our approach, which has broad conceptual and empirical roots that yield objective insights into the economic outlook.

How does ECRI compare to the OECD?

Nearly half a century ago, ECRI co-founder Geoffrey H. Moore pioneered the creation of international leading indexes. Almost a decade later, the Organisation for Economic Co-operation and Development (OECD) followed suit using a different statistical procedure. In addition, the components of their leading indexes – unlike ECRI’s – varied from country to country, based largely on historical back-fitting.


• The historical median leads of ECRI’s long leading indexes were at least three months greater than their OECD counterparts in the U.S. case, and at least four months more for Japan and Germany.

• OECD leading indexes are subject to more revision than ECRI indexes because, in addition to input data revisions, they are also revised due to monthly re-estimation of their components’ trends going back to the beginning of each time series. That is not true of ECRI’s indexes.

Both theoretically and empirically, ECRI’s leading indexes are superior to the corresponding OECD indexes. Furthermore, ECRI’s leading indexes are not limited to a single leading index of economic growth for each economy. Rather, we maintain multiple specialized leading indexes for each economy, and especially for the major economies, including China and India, for both of which we were the first to develop leading indexes.

More importantly, ECRI has been studying economic cycles – and forecasting recessions and recoveries – longer and more reliably than anyone, anywhere, and our methods aren’t taught anywhere in the world.

What is the recessionary window of vulnerability?

A “window of vulnerability” in the economic cycle is a period during which the cyclical drivers of the economy have weakened to the point where the economy is susceptible to a negative shock. Within that window of vulnerability, virtually any reasonable shock becomes a recessionary shock.

What are the lead times of your indexes?

In general, leading index lead times tend to be asymmetric, being longer at business cycle peaks (i.e., before recessions) and shorter at business cycle troughs (i.e., before recoveries). However, the lead times of leading index growth rates tend to be fairly symmetric, being more or less similar at growth rate cycle peaks and troughs (i.e., before downturns and upturns in economic growth, respectively).

While the actual leads vary to some extent from one turning point to the next, ECRI’s different leading indexes exhibit somewhat different leads:

• Long leading indexes typically lead turning points by around two to three quarters

• A “moderate” lead means the index typically leads turning points by around a couple of quarters

• Short leading indexes typically lead turning points by around one to two quarters

In 2011, you called for a recession that never happened - does that point to a flaw in your research?

We’ve looked at this question closely, and the answer is no.

Our directional call for a cyclical downturn in growth was correct, and the 2012-13 growth rate cycle downturn turned out to be the worst “non-recession” in over half a century. The reason it didn’t became a full-blown recession is because of something that’s unlikely to be repeated.

Most think it was the Fed’s actions (which reflected our assessment of cyclical risk) that prevented a recession, but our research shows that the real reason was the “Greater Moderation.”

Basically, U.S. economic cycle volatility collapsed, in large part because of a few years of very stable oil prices.

As the former head of BP’s global economics team noted in mid-2014, “the oil price has been above $100 for three years in a row, the highest … such period ever, but extremely stable, the lowest three-year volatility since 1970,” when prices were fixed. While there were supply disruptions, “[t]he cumulative level of these disruptions over the last three years is balanced almost one by one, almost barrel by barrel, by the increase in tight oil production in the U.S. So it’s an absolute fair statement to say [that] if we had only had the disruptions … you would have seen oil prices shooting up.”

Thus, despite a fairly normal pattern of supply disruptions, oil price volatility fell to a four-decade low in 2011-13, in large part, because of what’s been called the fastest ramp-up in oil production in history, creating an unusual period devoid of oil shocks.

In other words, the cyclical recessionary “window of vulnerability” was wide open, as shown by our leading indexes, but the oil shock didn’t happen despite the usual supply disruptions. The end result was the worst non-recession ever. And our leading indexes have correctly called the growth rate cycle upturns and downturns ever since.

What is your model?

We do not use models to make our cycle forecasts. Rather, we employ a robust leading indicator approach which is unrivaled in accurately calling turning points in economic growth and inflation worldwide. This is very different from mainstream economists, who base their forecasts on econometric models.

Our Services

How do I get more information about ECRI client services?

We are happy to speak with you directly about our client services. Please contact us via e-mail or phone and we’ll set up a call, video conference or in-person meeting.

Are ECRI services open to individuals?

Yes, some of our clients represent individuals or family offices.

What information do clients get that the public doesn't?

Our clients receive access to private advisory sessions as well as ECRI professional reports and data that is unavailable to the public. We help our clients manage cyclical risk, alerting them to directional shifts in the business cycle so they can better time critical decisions whether they involve asset management, hiring, production and pricing, or monetary policy.

Learn more about our services.

As a client, would I have access to ECRI principals?

Yes. Private advisory sessions are included as part of our client services.

Contact us for more information.

What can I expect from private advisory sessions?

Following our initial onboarding process, where we establish the most productive way to dovetail ECRI's insights into our clients’ existing decision-making process, we hold regular advisory sessions via phone, video conference and in-person meetings. These meetings are tailored to each client’s specific area of interest: we discuss the nuances of our outlook alongside their own cyclical concerns.

When does ECRI release its latest data and reports?

We are continually updating and releasing new information to our clients through our client website and advisory meetings.

How often are indexes updated?

Most of our more than 100 indexes are updated monthly; however, there are a handful that are available weekly, or even daily.

Are ECRI principals available for speaking engagements?

ECRI principals make presentations primarily to, and on behalf of, our clients. On occasion, special speaking engagements also occur.

Contact us for more information.

As a client will you give me the index components?

Our indexes are proprietary. Therefore, as a matter of policy their components are not provided to anybody, including our clients. Through our reports and private meetings our clients are fully apprised of the “story” behind all of our cycle turning point calls. We also work directly with them to customize the integration of cycle risk management into their existing processes.

Who are some of your clients?

Our ability to call the economy's turning points has made ECRI a trusted advisor of Fortune 500 companies, major asset managers and government agencies on all six continents. We help our clients manage cyclical risk, alerting them to directional shifts in the business cycle so they can better time critical decisions whether they involve asset management, hiring, production and pricing, or monetary policy.

See examples of client experiences.

Investment Managers:
•    Global Investment Manager
•    International Commodity Trading

Business Executives:
•    Global Semiconductor Manufacturer
•    Global Theme Parks

Government Policymakers:
•    The Federal Reserve Circa 1990s
•    The Reserve Bank of India

For Clients

Do ECRI principals travel to my area?

ECRI's headquarters are located in midtown Manhattan, where we frequently host client meetings. Furthermore, it is possible that we will visit a location near you as our principals regularly travel throughout the world for meetings.

In what format can I download data?

Clients can download index data into Excel on the client dashboard page. The data is also available via daily automated push.

Contact us for more information.

How do I save a set of indexes I want to download regularly?

Once you log in, look for Download Index Sets on the home page and click Create a new set. You can specify the region, index type, and timeframe for your index set. After you create an index set, you will be able to quickly access it for download from the home page and Reports & Indexes pages.

What do the different colors of lines represent in ECRI charts?

There is a standard color code used for the line colors in our charts:

Green denotes a leading series.
Blue denotes a coincident series.
Pink denotes a lagging series.
Red denotes a leading price (level or growth) series.
Black denotes a coincident price (level or growth) series.

Grey-shaded areas represent business cycle recessions, or cyclical downswings, in the level of a series.

Orange-shaded areas represent growth rate cycle downturns, or cyclical downswings, in the growth rate of a series.

Green-shaded areas represent cyclical downswings in a price level series.

Blue-shaded areas represent cyclical downswings in a price growth rate series.

Other colors and shaded areas may be used occasionally for data that do not fit any of the above descriptions.

ECRI Services

The clarity and conviction to break from the crowd at the right time.

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"eerily accurate"
- National Public Radio
Congrats on having the only coherent analysis available.
- ECRI Client
This approach works like a charm.
- Forbes Magazine
Your work stands alone in the industry. I wholeheartedly value and endorse your service!
- ECRI Client
In March [2009], the month the market scraped bottom, ECRI went forth with [a] tablepounding historical observation-. The implication could not have been clearer that a market rally, when it started, would be no sucker's affair but the real McCoy.
- Grant's Interest Rate Observer
[T]he Economic Cycle Research Institute [is] a private forecasting group with an excellent track record.
- The New York Times