While the ONS have suggested that the official data are likely to be better at picking up small retailers and unconventional shopping channels, such as internet purchases, the conformity of the picture given by the Distributive Trades survey with other potential indicators of spending, such as consumer confidence and the Agents reports, have led us to place less weight on the official data on retail spending for the present. 2  BIS Review 95/2008  The surveys will not always provide the best coincident guide, however. For instance, during the 1999-2002 period, the official data suggested greater swings in manufacturing output growth than did the Industrial Trends survey (see Chart 3). Now, during this period, we know that there was a rapid expansion in ICT-related activities, followed by a sharp contraction. The simple balance of “ups” over “downs” in the Industrial Trends survey could therefore be expected to have failed to reflect adequately the sharp movements in that sub-sector’s activity. So, for this period, the official data probably gave a better picture of what was going on. BIS Review 95/2008  3  A second use of surveys is in the application of forward-looking questions to form a view of the near-term outlook. In that regard, questions on business and consumer confidence, and on the trend in orders and backlogs, can give some indication of likely trends in output and spending.
Responses to those sorts of questions can, for instance, help us work out how businesses have been affected by the recent depreciation of sterling, and the tightening in credit conditions. A fourth use of the surveys is in providing measures of variables for which there is no official counterpart. In particular, the amount of economic slack in the economy is a key determinant of inflationary pressures. We have official indicators of slack in the labour market – unemployment, vacancies and the like – which is one factor determining pay growth. But we have no official measures of the amount of slack within businesses, which potentially affects pricing pressures. Business surveys such as the Industrial Trends survey do, however, ask how intensively firms are working their capital (see Chart 5). And the MPC draws on this  4  BIS Review 95/2008  information in forming a judgement about the overall margin of spare resources in the economy. A fifth, and perhaps less obvious, use of survey information is in refining our picture of the past. I noted earlier that the official data tends to get revised for some while after it is first released. But it turns out that there are some systematic patterns in the historical revision process. Moreover, for some series, we have found a tendency for revisions to be in the direction of reducing the discrepancy with the corresponding survey information.