Forecasting the Italian industrial production index in real time

Abstract
Daily electricity consumption data, available almost in real time, can be used in Italy to estimate the level of industrial production in any given month before the month is over. We present a number of procedures that do this using electricity consumption in the first 14 days of the month. (This is an extension of a previous model that used monthly electricity data.) We show that, with a number of adjustments, a model using half‐monthly electricity data generates acceptable estimates of the monthly production index. More precisely, these estimates are more accurate than univariate forecasts but less accurate than estimates based on monthly electricity data. A further improvement can be obtained by combining ‘half‐monthly’ electricity‐based estimates with univariate forecasts. We also present quarterly estimates and discuss confidence intervals for various types of forecasts.

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