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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

FAQs

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.

Specifically:

• 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.

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Testimonial

No one speaks with more authority about the economy's turning points.
- Fortune Magazine
This approach works like a charm.
- Forbes Magazine
ECRI is perhaps the only organisation to give advance warning of each of the past three recessions; just as impressive, it has never issued a false alarm. Jan. 2005
- The Economist
ECRI [is] the most accurate forecasting institution in the world.
- Sydney Morning Herald
ECRI can justify a certain smugness now that business cycles are back in fashion. The institute called the last two recessions and the current recovery months ahead of the pack.
- Harvard Business Review
Inflation Ahoy! We're indebted to the ECRI, that unnapping watchdog of inflation, for the FIG data.
- Alan Abelson, Barron's
ECRI has had a very stellar record. They've been making pretty bold calls and going against the conventional wisdom. So far their record has been one of the most impressive, and has been written up in the press as well as talked about in policy circles.
- IMF
(ECRI's) forecast of the [Great] recession helped us anticipate reduced merchandise sales; we proactively revised our inventory forecasts down months ago, and that has helped to greatly minimize the inventory swell and need for markdowns.
- Fortune 100 Company
I have to pay attention to those people and indicators that have pointed in the right direction - even when they've gone against the crowd (and my opinion at the time). One such outfit is the Economic Cycle Research Institute, whose various leading indicators actually have done just that - lead where things were headed.
- Randall Forsyth, Barron's
Nothing in the world compares with ECRI's insights into the business cycle. Those insights form a key part of our strategic and tactical management of asset class allocations. We have never been disappointed in following what ECRI's indicators suggest is likely to occur next.
- ECRI Client