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.

Forecasting US output growth using leading indicators: an appraisal using MIDAS models

We evaluate the predictive power of leading indicators for output growth at horizons up to 1 year. We use the MIDAS regression approach as this allows us to combine multiple individual leading indicators in a parsimonious way and to directly exploit the information content of the monthly series to predict quarterly output growth. When we use real-time vintage data, the indicators are found to have significant predictive ability, and this is further enhanced by the use of monthly data on the quarter at the time the forecast is made

On the predictive content of leading indicators: the case of U.S. real estate markets

This paper employs a probit and a Markov switching model using information from the Conference Board Leading Indicator and other predictor variables to forecast the signs of future rental growth in four key U.S. commercial rent series. We find that both approaches have considerable power to predict changes in the direction of commercial rents up to two years ahead, exhibiting strong improvements over a naïve model, especially for the warehouse and apartment sectors. We find that while the Markov switching model appears to be more successful, it lags behind actual turnarounds in market outcomes whereas the probit is able to detect whether rental growth will be positive or negative several quarters ahead.

The cyclical relations between traded property stock prices and aggregate time-series

This paper examines the cyclical regularities of macroeconomic, financial and property market aggregates in relation to the property stock price cycle in the UK. The Hodrick Prescott filter is employed to fit a long-term trend to the raw data, and to derive the short-term cycles of each series. It is found that the cycles of consumer expenditure, total consumption per capita, the dividend yield and the long-term bond yield are moderately correlated, and mainly coincident, with the property price cycle. There is also evidence that the nominal and real Treasury Bill rates and the interest rate spread lead this cycle by one or two quarters, and therefore that these series can be considered leading indicators of property stock prices. This study recommends that macroeconomic and financial variables can provide useful information to explain and potentially to forecast movements of property-backed stock returns in the UK.

Microbial and biochemical soil quality indicators and their potential for differentiating areas under contrasting agricultural management regimes

The aim of this study was to examine interrelationships between functional biochemical and microbial indicators of soil quality, and their suitability to differentiate areas under contrasting agricultural management regimes. The study included five 0.8 ha areas on a sandy-loam soil which had received contrasting fertility and cropping regimes over a 5 year period. These were organically managed vegetable, vegetable -cereal and arable rotations, an organically managed grass clover ley, and a conventional cereal rotation. The organic areas had been converted from conventional cereal production 5 years prior to the start of the study. All of the biochemical analyses, including light fraction organic matter (LFOM) C and N, labile organic N (LON), dissolved organic N and water-soluble carbohydrates showed significant differences between the areas, although the nature of the relationships between the areas varied between the different parameters, and were not related to differences in total soil organic matter content. The clearest differences were seen in LFOM C and N and LON, which were higher in the organic arable area relative to the other areas. In the case of the biological parameters, there were differences between the areas for biomass-N, ATP, chitin content, and the ratios of ATP: biomass and basal respiration: biomass. For these parameters, the precise relationships between the areas varied. However, relative to the conventionally managed area, areas under organic management generally had lower biomass-N and higher ATP contents. Arbuscular mycorrhizal fungus colonization potential was extremely low in the conventional area relative to the organic areas. Further, metabolic diversity and microbial community level physiological profiles, determined by analysis of microbial community metabolism using Biolog GN plates and the activities of eight key nutrient cycling enzymes, grouped the organic areas together, but separated them from the conventional area. We conclude that microbial parameters are more effective and consistent indicators of management induced changes to soil quality than biochemical parameters, and that a variety of biochemical and microbial analyses should be used when considering the impact of management on soil quality. (C) 2004 Elsevier Ltd. All rights reserved.

Forecast encompassing tests and probability forecasts

We consider tests of forecast encompassing for probability forecasts, for both quadratic and logarithmic scoring rules. We propose test statistics for the null of forecast encompassing, present the limiting distributions of the test statistics, and investigate the impact of estimating the forecasting models' parameters on these distributions. The small-sample performance is investigated, in terms of small numbers of forecasts and model estimation sample sizes. We show the usefulness of the tests for the evaluation of recession probability forecasts from logit models with different leading indicators as explanatory variables, and for evaluating survey-based probability forecasts.

Linkages between property asset returns and interest rates: evidence for the UK

This paper considers the effect of short- and long-term interest rates, and interest rate spreads upon real estate index returns in the UK. Using Johansen's vector autoregressive framework, it is found that the real estate index cointegrates with the term spread, but not with the short or long rates themselves. Granger causality tests indicate that movements in short term interest rates and the spread cause movements in the returns series. However, decomposition of the forecast error variances from VAR models indicate that changes in these variables can only explain a small proportion of the overall variability of the returns, and that the effect has fully worked through after two months. The results suggest that these financial variables could potentially be used as leading indicators for real estate markets, with corresponding implications for return predictability.

Global estimates of snow water equivalent from passive microwave instruments: history, challenges and future developments

Snow properties have been retrieved from satellite data for many decades. While snow extent is generally felt to be obtained reliably from visible-band data, there is less confidence in the measurements of snow mass or water equivalent derived from passive microwave instruments. This paper briefly reviews historical passive microwave instruments and products, and compares the large-scale patterns from these sources to those of general circulation models and leading reanalysis products. Differences are seen to be large between the datasets, particularly over Siberia. A better understanding of the errors in both the model-based and measurement-based datasets is required to exploit both fully. Techniques to apply to the satellite measurements for improved large-scale snow data are suggested.

Natural products as alternative treatments for metabolic bone disorders and for maintenance of bone health

Bone metabolism involves a complex balance between the deposition of matrix and mineralization and resorption. There is now good evidence that dietary components and herbal products can influence these processes, particularly by inhibiting bone resorption, thus having beneficial effects on the skeleton. For example, it has been reported that a number of common vegetables, including onion, garlic and parsley, can inhibit bone resorption in ovariectomized rats. Essential oils derived from sage, rosemary, thyme and other herbs inhibit osteoclast activity in vitro and in vitro and leading to an increase in bone mineral density. Soya, a rich source of isoflavones, has shown promising results and epidemiological evidence to support a use in maintaining bone health, and various traditional herbal formulae in Chinese and Ayurvedic medicine also have demonstrable effects in pharmacological models of osteoporosis. Recently, cannabinoids have been described as having positive effects on osteoblast differentiation, and the presence of cannabinoid receptors in bone tissue indicates a more complex role in bone metabolism than previously thought. The first part of this review briefly discusses normal bone metabolism and disorders caused by its disruption, with particular reference to osteoporosis and current pharmacological treatments. The effects of natural products on bone and connective tissue are then discussed, to include items of diet, herbal extracts and food supplements, with evidence for their efficacy outlined. Copyright (c) 2006 John Wiley & Sons, Ltd.

Problems in the coupling of eye and hand in the sequential movements of children with developmental coordination disorder

Background: Shifting gaze and attention ahead of the hand is a natural component in the performance of skilled manual actions. Very few studies have examined the precise co-ordination between the eye and hand in children with Developmental Coordination Disorder (DCD). Methods This study directly assessed the maturity of eye-hand co-ordination in children with DCD. A double-step pointing task was used to investigate the coupling of the eye and hand in 7-year-old children with and without DCD. Sequential targets were presented on a computer screen, and eye and hand movements were recorded simultaneously. Results There were no differences between typically developing (TD) and DCD groups when completing fast single-target tasks. There were very few differences in the completion of the first movement in the double-step tasks, but differences did occur during the second sequential movement. One factor appeared to be the propensity for the DCD children to delay their hand movement until some period after the eye had landed on the target. This resulted in a marked increase in eye-hand lead during the second movement, disrupting the close coupling and leading to a slower and less accurate hand movement among children with DCD. Conclusions In contrast to skilled adults, both groups of children preferred to foveate the target prior to initiating a hand movement if time allowed. The TD children, however, were more able to reduce this foveation period and shift towards a feedforward mode of control for hand movements. The children with DCD persevered with a look-then-move strategy, which led to an increase in error. For the group of DCD children in this study, there was no evidence of a problem in speed or accuracy of simple movements, but there was a difficulty in concatenating the sequential shifts of gaze and hand required for the completion of everyday tasks or typical assessment items.

ICTs and decision-making: findings from the Poverty Assessor

Pro-poor decision making depends on an understanding of the complexities and interrelationships between household livelihood, demographic, and economic factors. This article describes the design and implementation of the Poverty Assessor, a software programme to assist practitioners, policy makers, and researchers in visualising the direct impacts on poverty of specific livelihood factors and events among populations living in poverty. The software enables users to upload their own data and profile households in relation to the national poverty line, by selecting from a range of demographic and livelihood indicators. The authors present findings from the programme, using a dataset from Bolivia.

Health and safety on construction sites in Ghana

The state of health and safety on construction sites in Ghana was investigated using first hand observation of fourteen (14) construction project sites in 2009 and 2010. At each site, the construction project, workers and the physical environment of the site were inspected and evaluated against health and safety indicators taken from the literature. The results reveal a poor state of health and safety on Ghanaian construction sites. The primary reasons are a lack of strong institutional framework for governing construction activities and poor enforcement of health and safety policies and procedures. Also, Ghanaian society does not place a high premium on health and safety of construction workers on site. Interviews with workers indicated that injuries and accidents are common on sites. However, compensation for injury is often at the discretion of the contractor although collective bargaining agreements between Labour unions and employers prescribe obligations for the contractor in the event of injury to a worker.