And the survey says…

Some business buzzwords make a big
splash and fall quickly out of favor. But
when they denote sound practices or improved processes, they can gain traction
and lead companies to new ways of doing
business. Such is the case with “econometrics.”

“Econometrics utilizes statistics, data collection and economic theory to observe and
implement real world application and analysis,” says Don Sabbarese, Ph.D., director,
Econometric Center, Kennesaw State
University. “We chose the name because it
defines the essence of what we do.”

Smart Business spoke with Sabbarese
about how economic centers like Kennesaw State University’s supply economists
and purchasing managers with crucial indicators.

What are the Econometric Center’s main purposes?

Our niche is collecting, analyzing and disseminating important economic data and
information to the private and governmental sectors to enhance their decision-making. The center is a valuable resource to
businesses and governments from the local,
state and Southeast region. In addition, it
increases the access these entities have to
the broader resources of the faculty of the
Coles College of Business.

How does the Econometric Center interact
with the businesses in the region?

The center provides businesses in the
region — through various news media outlets and direct presentations — with analyses of the current economic environment,
including seven monthly Purchasing
Manager Index Reports for Georgia,
Alabama, Florida, Tennessee, Mississippi,
Louisiana and the Southeast. The reports
track and analyze trends and activity of new
orders, production, employment, supplier
delivery time, finished goods inventories
and commodity prices. It provides purchasing managers and economists with one of
the earliest indicators of cyclical change and
direction. It, like the National Index, leads
other related data releases by four weeks. In addition, the Econometric Center has conducted biannual manufacturing industry
studies in conjunction with the Georgia
Industry Association, Georgia Quick Start
and Habif, Arogeti & Wynne LLP.

What is PriceQuantics and how does it assist
purchasing managers?

Understanding the commodity price trend
is critical for any business or government
analyzing commodity price movements to
control the cost of inputs used in its production process. Historical, current and
future commodity price information
enhances the ability to identify trends and
conditions for better decision-making.
PriceQuantics offers users a valuable
resource for commodity price trends and
forecasting.

We’re currently working on the second
version of PriceQuantics. Its new, Web-based infrastructure intelligently collects,
analyzes and forecasts price changes by
applying advanced statistics and computing
to a database of 5,000 commodities and
products sold in the U.S. It offers decision-makers, such as purchasing managers,
quick access to the information.

What commodities are tracked?

There are more than 5,000 products and
commodities downloaded from various
online sources including the Bureau of
Labor Statistics and the Commerce
Department. It’s a huge array, and not just
raw commodities. For example, we track
the prices on different types of steel. We’re
trying to design it in a way that meets the
needs of people who require that kind of
information.

What types of companies are prime candidates for a partnership with the Econometric
Center?

Small- to mid-size companies, which lack
the in-house resources for the types of services the Econometric Center offers, are
more typical partners. However, the center’s
expertise is available to partner with any private sector or government institution.

How are the students involved, and how has
the center impacted hiring trends?

The Econometric Center has utilized student interns in the past. Student involvement is typically tied to a specific project.
Upon request by businesses, the center will
occasionally assist to identify and recommend qualified students.

What are future goals for the center?

We’re working to strengthen ties with the
supply chain community in the Southeast.
Besides the PMI report and PriceQuantics,
we plan to include other studies and services tailored to the community’s needs that
demand econometrics and/or advanced statistics. Another interesting niche to work for
includes industry groups and associations.
As the center builds up its knowledge base
and information infrastructure, we will be
able to prepare monthly industry analyses
based on sales, inventories, prices and economic indicators.

DONALD SABBARESE, Ph.D., is director of the Econometric
Center, Coles College of Business, Kennesaw State University.
Reach him at (770) 423-6094 or [email protected].