Forecasting UK real estate cycle phases with leading indicators: a probit approach

This paper examines the significance of widely used leading indicators of the UK economy for predicting the cyclical pattern of commercial real estate performance. The analysis uses monthly capital value data for UK industrials, offices and retail from the Investment Property Databank (IPD). Prospective economic indicators are drawn from three sources namely, the series used by the US Conference Board to construct their UK leading indicator and the series deployed by two private organisations, Lombard Street Research and NTC Research, to predict UK economic activity. We first identify turning points in the capital value series adopting techniques employed in the classical business cycle literature. We then estimate probit models using the leading economic indicators as independent variables and forecast the probability of different phases of capital values, that is, periods of declining and rising capital values. The forecast performance of the models is tested and found to be satisfactory. The predictability of lasting directional changes in property performance represents a useful tool for real estate investment decision-making.

The persistence of solar activity indicators and the descent of the sun into Maunder Minimum conditions

The recent low and prolonged minimum of the solar cycle, along with the slow growth in activity of the new cycle, has led to suggestions that the Sun is entering a Grand Solar Minimum (GSMi), potentially as deep as the Maunder Minimum (MM). This raises questions about the persistence and predictability of solar activity. We study the autocorrelation functions and predictability R^2_L(t) of solar indices, particularly group sunspot number R_G and heliospheric modulation potential phi for which we have data during the descent into the MM. For R_G and phi, R^2_L (t) > 0.5 for times into the future of t = 4 and 3 solar cycles, respectively: sufficient to allow prediction of a GSMi onset. The lower predictability of sunspot number R_Z is discussed. The current declines in peak and mean R_G are the largest since the onset of the MM and exceed those around 1800 which failed to initiate a GSMi.

Varietal effects of cowpea, Vigna unguiculata, on tolerance to malathion in Callosobruchus maculatus (Coleoptera: Bruchidae)

The impact of cowpea variety on the response of cowpea bruchid, Callosobruchus maculatus, to malathion was investigated. The interaction of six cowpea varieties (Adamawa Brown, Ife BPC, Ife Brown, Lilongwe, Ntcheu and NCRI-L25) with the geographical strains of C. maculatus (Brazil and Cameroon), temperature (23, 25, 27 C) and insecticide concentration were considered. Cowpea variety (V) had an unpredictable effect on C. maculatus response to malathion. Bruchid populations produced by Ife BPC were the most susceptible to malathion while those yielded by NCRI-L25 were the most tolerant. Regardless of the cowpea variety, the Brazil strain showed higher tolerance than the Cameroon strain. There was significant effect of temperature (T) and insecticide concentration (C) on malathion tolerance in both strains (S). Likewise, there was significant impact of all two-way interactions on cowpea bruchid tolerance except V x C. Significant three-way interactions on C. maculatus tolerance to malathion was only observed in S T V and S T C. The predictability of changing one of the factors on the susceptibility of C. maculatus to insecticide was very low. This study suggests a need to take the insecticide tolerance of insect populations produced by novel varieties into account during plant breeding in addition to factors such as yield and resistance to insect and disease attack.

Can sentiment surveys pre-empt real estate market activities?

We evaluate a number of real estate sentiment indices to ascertain current and forward-looking information content that may be useful for forecasting the demand and supply activities. Our focus lies on sector-specific surveys targeting the players from the supply-side of both residential and non-residential real estate markets. Analyzing the dynamic relationships within a Vector Auto-Regression (VAR) framework, we test the efficacy of these indices by comparing them with other coincident indicators in predicting real estate returns. Overall, our analysis suggests that sentiment indicators convey important information which should be embedded in the modeling exercise to predict real estate market returns. Generally, sentiment indices show better information content than broad economic indicators. The goodness of fit of our models is higher for the residential market than for the non-residential real estate sector. The impulse responses, in general, conform to our theoretical expectations. Variance decompositions and out-of-sample predictions generally show desired contribution and reasonable improvement respectively, thus upholding our hypothesis. Quite remarkably, consistent with the theory, the predictability swings when we look through different phases of the cycle. This perhaps suggests that, e.g. during recessions, market players’ expectations may be more accurate predictor of the future performances, conceivably indicating a ‘negative’ information processing bias and thus conforming to the precautionary motive of consumer behaviour.

TIGGE: comparison of the prediction of Southern Hemisphere extratropical cyclones by different ensemble prediction systems.

The prediction of Northern Hemisphere (NH) extratropical cyclones by nine different ensemble prediction systems(EPSs), archived as part of The Observing System Research and Predictability Experiment (THORPEX) Interactive Grand Global Ensemble (TIGGE), has recently been explored using a cyclone tracking approach. This paper provides a continuation of this work, extending the analysis to the Southern Hemisphere (SH). While the EPSs have larger error in all cyclone properties in the SH, the relative performance of the different EPSs remains broadly consistent between the two hemispheres. Some interesting differences are also shown. The Chinese Meteorological Administration (CMA) EPS has a significantly lower level of performance in the SH compared to the NH. Previous NH results showed that the Centro de Previsao de Tempo e Estudos Climaticos (CPTEC) EPS underpredicts cyclone intensity. The results of this current study show that this bias is significantly larger in the SH. The CPTEC EPS also has very little spread in both hemispheres. As with the NH results, cyclone propagation speed is underpredicted by all the EPSs in the SH. To investigate this further, the bias was also computed for theECMWFhigh-resolution deterministic forecast. The bias was significantly smaller than the lower resolution ECMWF EPS.

An improvement in clear-air turbulence forecasting based on spontaneous imbalance theory: the ULTURB algorithm

Recent research has shown that Lighthill–Ford spontaneous gravity wave generation theory, when applied to numerical model data, can help predict areas of clear-air turbulence. It is hypothesized that this is the case because spontaneously generated atmospheric gravity waves may initiate turbulence by locally modifying the stability and wind shear. As an improvement on the original research, this paper describes the creation of an ‘operational’ algorithm (ULTURB) with three modifications to the original method: (1) extending the altitude range for which the method is effective downward to the top of the boundary layer, (2) adding turbulent kinetic energy production from the environment to the locally produced turbulent kinetic energy production, and, (3) transforming turbulent kinetic energy dissipation to eddy dissipation rate, the turbulence metric becoming the worldwide ‘standard’. In a comparison of ULTURB with the original method and with the Graphical Turbulence Guidance second version (GTG2) automated procedure for forecasting mid- and upper-level aircraft turbulence ULTURB performed better for all turbulence intensities. Since ULTURB, unlike GTG2, is founded on a self-consistent dynamical theory, it may offer forecasters better insight into the causes of the clear-air turbulence and may ultimately enhance its predictability.

Assessing and understanding the impact of stratospheric dynamics and variability on the earth system

Advances in weather and climate research have demonstrated the role of the stratosphere in the Earth system across a wide range of temporal and spatial scales. Stratospheric ozone loss has been identified as a key driver of Southern Hemisphere tropospheric circulation trends, affecting ocean currents and carbon uptake, sea ice, and possibly even the Antarctic ice sheets. Stratospheric variability has also been shown to affect short term and seasonal forecasts, connecting the tropics and midlatitudes and guiding storm track dynamics. The two-way interactions between the stratosphere and the Earth system have motivated the World Climate Research Programme's (WCRP) Stratospheric Processes and Their Role in Climate (SPARC) DynVar activity to investigate the impact of stratospheric dynamics and variability on climate. This assessment will be made possible by two new multi-model datasets. First, roughly 10 models with a well resolved stratosphere are participating in the Coupled Model Intercomparison Project 5 (CMIP5), providing the first multi-model ensemble of climate simulations coupled from the stratopause to the sea floor. Second, the Stratosphere Historical Forecasting Project (SHFP) of WCRP's Climate Variability and predictability (CLIVAR) program is forming a multi-model set of seasonal hindcasts with stratosphere resolving models, revealing the impact of both stratospheric initial conditions and dynamics on intraseasonal prediction. The CMIP5 and SHFP model-data sets will offer an unprecedented opportunity to understand the role of the stratosphere in the natural and forced variability of the Earth system and to determine whether incorporating knowledge of the middle atmosphere improves seasonal forecasts and climate projections. Capsule New modeling efforts will provide unprecedented opportunities to harness our knowledge of the stratosphere to improve weather and climate prediction.

Properties of singular vectors using convective available potential energy as final time norm

We study the feasibility of using the singular vector technique to create initial condition perturbations for short-range ensemble prediction systems (SREPS) focussing on predictability of severe local storms and in particular deep convection. For this a new final time semi-norm based on the convective available potential energy (CAPE) is introduced. We compare singular vectors using the CAPE-norm with SVs using the more common total energy (TE) norm for a 2-week summer period in 2007, which includes a case of mesoscale extreme rainfall in the south west of Finland. The CAPE singular vectors perturb the CAPE field by increasing the specific humidity and temperature of the parcel and increase the lapse rate above the parcel in the lower troposphere consistent with physical considerations. The CAPE-SVs are situated in the lower troposphere. This in contrast to TE-SVs with short optimization times which predominantly remain in the high troposphere. By examining the time evolution of the CAPE singular values we observe that the convective event in the south west of Finland is clearly associated with high CAPE singular values.

A verification framework for interannual-to-decadal predictions experiments

Decadal predictions have a high profile in the climate science community and beyond, yet very little is known about their skill. Nor is there any agreed protocol for estimating their skill. This paper proposes a sound and coordinated framework for verification of decadal hindcast experiments. The framework is illustrated for decadal hindcasts tailored to meet the requirements and specifications of CMIP5 (Coupled Model Intercomparison Project phase 5). The chosen metrics address key questions about the information content in initialized decadal hindcasts. These questions are: (1) Do the initial conditions in the hindcasts lead to more accurate predictions of the climate, compared to un-initialized climate change projections? and (2) Is the prediction model’s ensemble spread an appropriate representation of forecast uncertainty on average? The first question is addressed through deterministic metrics that compare the initialized and uninitialized hindcasts. The second question is addressed through a probabilistic metric applied to the initialized hindcasts and comparing different ways to ascribe forecast uncertainty. Verification is advocated at smoothed regional scales that can illuminate broad areas of predictability, as well as at the grid scale, since many users of the decadal prediction experiments who feed the climate data into applications or decision models will use the data at grid scale, or downscale it to even higher resolution. An overall statement on skill of CMIP5 decadal hindcasts is not the aim of this paper. The results presented are only illustrative of the framework, which would enable such studies. However, broad conclusions that are beginning to emerge from the CMIP5 results include (1) Most predictability at the interannual-to-decadal scale, relative to climatological averages, comes from external forcing, particularly for temperature; (2) though moderate, additional skill is added by the initial conditions over what is imparted by external forcing alone; however, the impact of initialization may result in overall worse predictions in some regions than provided by uninitialized climate change projections; (3) limited hindcast records and the dearth of climate-quality observational data impede our ability to quantify expected skill as well as model biases; and (4) as is common to seasonal-to-interannual model predictions, the spread of the ensemble members is not necessarily a good representation of forecast uncertainty. The authors recommend that this framework be adopted to serve as a starting point to compare prediction quality across prediction systems. The framework can provide a baseline against which future improvements can be quantified. The framework also provides guidance on the use of these model predictions, which differ in fundamental ways from the climate change projections that much of the community has become familiar with, including adjustment of mean and conditional biases, and consideration of how to best approach forecast uncertainty.

Predicting outliers in ensemble forecasts

An ensemble forecast is a collection of runs of a numerical dynamical model, initialized with perturbed initial conditions. In modern weather prediction for example, ensembles are used to retrieve probabilistic information about future weather conditions. In this contribution, we are concerned with ensemble forecasts of a scalar quantity (say, the temperature at a specific location). We consider the event that the verification is smaller than the smallest, or larger than the largest ensemble member. We call these events outliers. If a K-member ensemble accurately reflected the variability of the verification, outliers should occur with a base rate of 2/(K + 1). In operational forecast ensembles though, this frequency is often found to be higher. We study the predictability of outliers and find that, exploiting information available from the ensemble, forecast probabilities for outlier events can be calculated which are more skilful than the unconditional base rate. We prove this analytically for statistically consistent forecast ensembles. Further, the analytical results are compared to the predictability of outliers in an operational forecast ensemble by means of model output statistics. We find the analytical and empirical results to agree both qualitatively and quantitatively.

The potential for skill across the range of the seamless weather-climate prediction problem: a stimulus for our science

Predictability is considered in the context of the seamless weather-climate prediction problem, and the notion is developed that there can be predictive power on all time-scales. On all scales there are phenomena that occur as well as longer time-scales and external conditions that should combine to give some predictability. To what extent this theoretical predictability may actually be realised and, further, to what extent it may be useful is not clear. However the potential should provide a stimulus to, and high profile for, our science and its application for many years.

Measuring significant variability characteristics: An assessment of three UK renewables

The variability of renewable energy is widely recognised as a challenge for integrating high levels of renewable generation into electricity systems. However, to explore its implications effectively, variability itself should first be clearly understood. This is particularly true for national electricity systems with high planned penetration of renewables and limited interconnection such as the UK. Variability cannot be considered as a distinct resource property with a single measurable parameter, but is a multi-faceted concept best described by a range of distinct characteristics. This paper identifies relevant characteristics of variability, and considers their implications for energy research. This is done through analysis of wind, solar and tidal current resources, with a primary focus on the Bristol Channel region in the UK. The relationship with electricity demand is considered, alongside the potential benefits of resource diversity. Analysis is presented in terms of persistence, distribution, frequency and correlation between supply and demand. Marked differences are seen between the behaviours of the individual resources, and these give rise to a range of different implications for system integration. Wind shows strong persistence and a useful seasonal pattern, but also a high spread in energy levels at timescales beyond one or two days. The solar resource is most closely correlated with electricity demand, but is undermined by night-time zero values and an even greater spread of monthly energy delivered than wind. In contrast, the tidal resource exhibits very low persistence, but also much greater consistency in energy values assessed across monthly time scales. Whilst this paper focuses primarily on the behaviour of resources, it is noted that discrete variability characteristics can be related to different system impacts. Persistence and predictability are relevant for system balancing, whereas statistical distribution is more relevant when exploring issues of asset utilisation and energy curtailment. Areas of further research are also identified, including the need to assess the value of predictability in relation to other characteristics.

Enhanced seasonal forecast skill following stratospheric sudden warmings

Advances in seasonal forecasting have brought widespread socio-economic benefits. However, seasonal forecast skill in the extratropics is relatively modest, prompting the seasonal forecasting community to search for additional sources of predictability. For over a decade it has been suggested that knowledge of the state of the stratosphere can act as a source of enhanced seasonal predictability; long-lived circulation anomalies in the lower stratosphere that follow stratospheric sudden warmings are associated with circulation anomalies in the troposphere that can last up to two months. Here, we show by performing retrospective ensemble model forecasts that such enhanced predictability can be realized in a dynamical seasonal forecast system with a good representation of the stratosphere. When initialized at the onset date of stratospheric sudden warmings, the model forecasts faithfully reproduce the observed mean tropospheric conditions in the months following the stratospheric sudden warmings. Compared with an equivalent set of forecasts that are not initialized during stratospheric sudden warmings, we document enhanced forecast skill for atmospheric circulation patterns, surface temperatures over northern Russia and eastern Canada and North Atlantic precipitation. We suggest that seasonal forecast systems initialized during stratospheric sudden warmings are likely to yield significantly greater forecast skill in some regions.

Understanding advances in the simulation of intraseasonal variability in the ECMWF model. Part I: the representation of the MJO

As a major mode of intraseasonal variability, which interacts with weather and climate systems on a near-global scale, the Madden – Julian Oscillation (MJO) is a crucial source of predictability for numerical weather prediction (NWP) models. Despite its global significance and comprehensive investigation, improvements in the representation of the MJO in an NWP context remain elusive. However, recent modifications to the model physics in the ECMWF model led to advances in the representation of atmospheric variability and the unprecedented propagation of the MJO signal through the entire integration period. In light of these recent advances, a set of hindcast experiments have been designed to assess the sensitivity of MJO simulation to the formulation of convection. Through the application of established MJO diagnostics, it is shown that the improvements in the representation of the MJO can be directly attributed to the modified convective parametrization. Furthermore, the improvements are attributed to the move from a moisture-convergent- to a relative-humidity-dependent formulation for organized deep entrainment. It is concluded that, in order to understand the physical mechanisms through which a relative-humidity-dependent formulation for entrainment led to an improved simulation of the MJO, a more process-based approach should be taken. T he application of process-based diagnostics t o t he hindcast experiments presented here will be the focus of Part II of this study.

Numerical prediction of atmospheric blocking-A case study

A series of numerical models have been used to investigate the predictability of atmospheric blocking for an episode selected from FGGE Special Observing Period I. Level II-b FGGE data have been used in the experiment. The blocking took place over the North Atlantic region and is a very characteristic example of high winter blocking. It is found that the very high resolution models developed at ECMWF, in a remarkable way manage to predict the blocking event in great detail, even beyond 1 week. Although models with much less resolution manage to predict the blocking phenomenon as such, the actual evolution differs very much from the observed and consequently the practical value is substantially reduced. Wind observations from the geostationary satellites are shown to have a substantial impact on the forecast beyond 5 days, as well as an extension of the integration domain to the whole globe. Quasi-geostrophic baroclinic models and, even more, barotropic models, are totally inadequate to predict blocking except in its initial phase. The prediction experiment illustrates clearly that efforts which have gone into the improvement of numerical prediction models in the last decades have been worth while.