Question

Assume you are a fundamental research analyst following the construction industry for a large brokerage firm. State and briefly explain economic series, economic indicators or economic data items that would be significant to the consumer durables industry and company research

Answer 1

An economic indicator is a piece of economic data, usually of macroeconomic scale, that is used by analysts to interpret current or future investment possibilities. These indicators also help to judge the overall health of an economy.

• An economic indicator is a macroeconomic measurement used by analysts to understand current and future economic activity and opportunity.
• The most widely-used economic indicators come from data released by the government and non-profit organizations or universities.
• Indicators can be leading—which tend to precede trends, lagging—which confirm trends, or coincident—that which is happening now.

Durables, also known as durable goods or consumer durables, is a category of consumer goods that do not wear out quickly, and therefore do not have to be purchased frequently. They are known as "durable goods" because they tend to last for at least three years. They are, of course, a part of core retail sales data.

Some examples of durables are appliances, home and office furnishings, lawn and garden equipment, consumer electronics, toys, small tools, sporting goods, photographic equipment, jewelry, motor vehicles and motor vehicle parts, turbines, and semiconductors.

Growth of consumer durables segment is expected to pick up in the last quarter taking the sector's expansion in 2019-20 to 15 per cent.

The expert also said that the economic slowdown has not affected the sector, which grew by 10 per cent in the first three quarters of 2019-20, as people continue to spend on consumer products like ACs, refrigerators, washing machines and other appliances.The last quarter would be much better than first three, so overall growth in the current fiscal year is expected to be over 15 per cent. The sector has grown at around 10 per cent in the current financial year.