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 firstname.lastname@example.org.