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10-7-25 It sure doesn\u2019t help forecasters when we can\u2019t get fresh data. So how can we forecast when there is no current data forthcoming?<\/p>\n
One of the data sets that my forecasting models are set to calculate is annual forecast on smaller sets of data within the year. For example: The Total Spending SAAR average for the months of AMJJAS (Apr thru Sept) when extended for a full 12 months, predicts the annual spending within +\/- 1%. This calculation has been within this 1% limit 22 times in 24 years. The other 2 years were off by 1.1% and 2.2% (in 2020).<\/p>\n
But, the last actual data we have is July. For Nonresidential Bldgs, the average predicted from AMJJ (Apr thru July) predicted the annual total Nonres Bldgs spending within 1.8% 13 out of the last 14 years (2011 to 2024), with one year being 2.6%. The average of those 14 years is less than 1% off from the actual.<\/p>\n
This is not a simple average. Each month produces a different share of annual spending. For ex: Based on 20-year averages, January and February each produce only about 7% of annual Nonres Bldgs spending while June and July produce each about 9% of annual spending. When a small set of data is used, the spending in each of those months is compared to the 20-yr average for those months and projected out to get 100% or a full 12 months of spending. <\/p>\n
The small data set of AMJJ, when used to predict 2025 Nonres Bldgs spending, forecasts +\/- 0.9% or $730bil to $756bil. The average predicts spending on Nonres Bldgs will hit $743bil. My current forecast, which includes actual data thru July and forecast to year end, predicts spending will hit $749bil.<\/p>\n
Residential spending, based on small data set is between $882bil and $920bil., with the average predicting $901bil. My current forecast with all actual data from Jan thru July and forecast thru year end is $892bil. <\/p>\n
The best small data set predictor is having data for AMJJAS. This predicts total spending will come in between $2109bil and $2149bil, with the average for the year at $2133bil. My current forecast predicts spending for 2025 will total $2140bil. <\/p>\n
Generally, I look at these small data set calculations to insure I haven\u2019t made some kind of blunder in my forecast. In this case, the small data set gives some comfort level that the annual forecast, although based on only 7 months of actual data, may not be very far off from what to expect at year end.<\/p>\n<\/p><\/div>\n