For policymakers and businesses, understanding the current state of the economy and where it is headed is crucial for decision making. The most comprehensive measure of economic activity, gross domestic product (GDP), is published with a substantial lag, as are a number of leading economic indicators (LEIs), which predict change in the business cycle.
Increasingly, forecasters and policymakers have sought higher-frequency data sources. IP Australia has an ongoing program of research to understand how intellectual property (IP) data responds to economic shocks and cycles.
Key findings
- Trade mark filings provide an early indicator of significant turning points in the business cycle and where the economy is headed in the near term.
- Compared against 24 key leading economic indicators (LEIs), trade marks rank 6th in their ability to predict recessionary phases of Australia’s business cycle.
- Based on the study’s estimates, a 10% increase in the number of trade marks filed in a given quarter predicts a 2.7% increase in real GDP two quarters after.