The Canadian Chamber of Commerce’s Business Data Lab has unveiled the nowcast tool BDLNow, which estimates Canada’s gross domestic product in real time.
The tool generates projections in advance of Statistics Canada data. It uses a dynamic factor model that integrates 45 high-frequency economic indicators and generates the near-term estimate for each indicator. The incorporated indicators include retail sales, manufacturing shipments, employment, commodity prices, and financial market data.
Indicators’ relative importance and prediction in the model are updated with the influx of new data. Every Monday, both data and the value of each variable are updated.
The BDLNow tool’s model is inspired by the New York Federal Reserve’s nowcast model. The tool enables users to monitor how updates on key economic indicators affect GDP projection, according to the Canadian Chamber of Commerce.
Users can also compare estimates and contrast them with the projections of other professional forecasters. The Canadian Chamber of Commerce explained that monitoring quarterly GDP data is valuable as a reliable gauge of overall economic trends.
The tool reflects the BDL’s data democratization commitment. The BDL’s principal economist, Andrew DiCapua, explained that the lab’s goal was to “break down the complexity behind this tool and enhance understanding of the market-moving indicators that matter most.”
BDL vice president Patrick Gill added that the BDLNow tool debuts at a time of significant economic uncertainty, when users require timely intelligence. He said that the tool “bridges the gap between private forecasts and today’s demand for real-time data.”
The BDL said that as a nowcast, the tool does not consider long-term growth trends; thus estimates beyond the present or subsequent quarter should be interpreted with less confidence.
BDLNow is the latest tool developed by the lab. Other BDL tools are the Business Conditions Terminal, the Canada-U.S. Trade Tracker, and the Canadian and U.S. City Tariff Vulnerability Indexes.