Surveys
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Survey Method

A cornerstone of the BER's work over the years has been its regular business surveys - business executives' rating of current business conditions and their immediate and short-term expectations. This information (which the BER processes into workable time series data) has a proven track record as exceptionally reliable and as leading economic indicators. The BER's business and consumer confidence indices are two of the best-known indicators. The surveys also have a sectoral and regional focus. More detailed background information on business surveys are provided below.

 

What are business surveys?
  • They are simple and rapid surveys, designed to meet the needs of short-term analysis of business conditions in the trade, manufacturing and construction sectors.

  • The business survey questionnaire contains a small number of questions. These questions are qualitative in nature, e.g. 
    "Compared to the same quarter a year ago, are the volume of sales 
    up, 
    the same or 
    down?"

  • The sample remains the same from one survey to the next. A panel is in effect 
    established.

  • The sample is divided according to the main types of merchandise. Each firm gets a 
    weighting in relation to turnover to provide for widely differing sizes.

  • The survey results are published in quarterly reports, namely Retail Survey, Manufacturing Survey and Building & Construction. In the reports the results are interpreted and presented in the form of tables and graphs.

What is the international standing of business surveys?
  • IFO in Germany developed the business survey method in 1949. South Africa was one of the first seven countries to start using this method when the BER conducted its first survey in March 1954.

  • Currently this method is applied in 57 countries. Some of the best known surveys are those of the European Union and the Tankan in Japan. These surveys have a high international standing - financial markets closely monitor these results.

  • Research and progress made on the business survey technique are presented every two years at an international conference organized by Ciret (Center for International Research on Economic Tendency Surveys).

Completion of the questionnaire - who, when and how?
  • Who? The best person to complete the questionnaire is someone well informed about the firm's overall performance, such as the chief executive, financial director, marketing director, senior sales manager, proprietor or shopkeeper. Participation is totally voluntary.

  • When? Participants receive the questionnaire at the beginning of March, June, September and December and have to return it by no later than the third week of the month. The date of return is always specified on the questionnaire.

  • How? Participants only have to tick off if a particular activity (e.g. sales, orders, stocks and employment) is up, the same or down. Any manager who is aware of the firm's current business condition will therefore be able to complete the questionnaire within a few minutes, as no figures are requested.

  • Participants have to complete a "participant details" form every few years to ensure that they are correctly classified.

  • All information is treated as confidential.

  • All respondents receive an exclusive, free copy of the summary of the survey results as a token of our appreciation for taking part in the survey. This has proved to be an indispensable planning tool.

How can respondents benefit from taking part in business surveys?
  • The summary of survey results provides the most up to date information on how fellow executives experienced the quarter that just ended and their expectations for the next quarter regarding sales volumes, orders placed, stocks, purchase prices, the general business climate etc.

Example: If the percentage of respondents rating sales volumes higher / the same / lower than the same quarter a year ago is as follows;

Higher Same Lower
70 10 20

We can conclude that the majority of participants experienced higher sales. A net majority (i.e. the percentage of respondents rating sales higher less the percentage rating sales lower) of 50% is registered in the above example. A net majority of -10% for example would have indicated a decline in sales volumes.

  • The individual respondent could therefore ask him or herself: Did my firm participate in these higher sales? If not, why? The results provide benchmarks. They enable participants to compare their firm's performance with that of the rest of the sector without having to directly ask competitors for such information.

  • Short-term planning is hampered as official statistics are released with a lag in time. The business survey results reveal what happened between the release of the last official figure and the current state of affairs. In addition, the results indicate what respondents expect (or forecast) for the next quarter. This is unique information.

  • Furthermore the survey results of successive quarters provide a means of tracking cyclical movements, pinpointing trend changes and establishing forecasts. Knowledge about the current state of the business cycle is crucial for planning. For example, during a cyclical downturn it is difficult to match the previous year's sales growth, assuming all other things remain the same. It is also crucial to detect a cyclical upturn in advance to place orders to benefit from the expected increase in sales.

  • The survey results not only reveal, in advance, the direction of sales, selling prices, employment etc. (for which official figures are published), but also provide unique information, such as retailer confidence, rating of business conditions or sales expectations, for which no official figures exist. It is now widely recognized that these subjective individual expectations play a key role in economic developments.