DEMAND FORECAST WITH BUSINESS CLIMATE INDEX FOR A STEEL AND IRON INDUSTRY REPRESENTATIVE

The steel and iron industry production is dedicated to serve other industries mainly. This makes the exercise of demand forecasting different than for consumer goods. The common sense says that demand fluctuations are influenced by general economic soundness. An attempt was made to address the question of improving forecast’s accuracy by adding a business cycle indicator as an input variable. The SARIMAX model was applied. Including a business climate indicator improved model’s performance, however no co-integration is observed between the two series.