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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 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 Reservce 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.

How do I read the Weekly Leading Index (WLI) and Future Inflation Gauge (FIG) "dials" shown on the public Reports and Indexes page?

The WLI is a forward-looking indicator of turns in the economic cycle, while the FIG is a forward-looking measure of cyclical peaks and troughs in inflation. The boldest arrows within the dials reflect recent data, while the more faded arrows indicate past readings. The progression of the arrows reveals whether the cycle is strengthening or weakening.

View the WLI and FIG “dials.”

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 1990-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.

We publicly release limited data on one of our leading indexes:

• The U.S. Weekly Leading Index (WLI) of economic activity is available every Friday.

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.

ECRI Services

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

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Testimonial

(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
ECRI continues to be an important resource in determining our tactical allocation. For over a decade their economic cycle forecasts and detailed research topics have been a critical part of our decision making process.
- ECRI Client
Congrats on having the only coherent analysis available.
- ECRI Client
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
In the opinion littered world of economic forecasting, ECRI is Mr. Spock - deeply analytical, dispassionate, and accurate.
- ECRI Client