This paper assesses the information content of two survey indicators for
consumption developments in the near future for eight European countries
in the period 1985-1998. Empirical work on this topic typically focuses
on consumer confidence, the perceptions of buyers of consumption goods.
This paper examines whether perceptions of sellers of consumption goods,
measured by retail trade surveys, may also improve short-term monitoring
of consumption. We find that both consumer confidence and retailer
confidence embody valuable information, when analysed in isolation. For
France, Italy and Spain we conclude that adding retail confidence does
not improve the indicator model once consumer confidence has been
included. For the UK the reverse case is obtained. For the remaining
four countries we show that combining consumer sentiment and retail
trade confidence into a composite indicator leads to optimal results.
Our results suggest that incorporating information from retail trade
surveys may offer significant benefits for the analysis of short-term
prospects of consumption. Copyright (C) 2004 John Wiley Sons, Ltd.
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