The economy cannot be read from a single number, just as a person's health cannot be read from a single measurement. There are indicators that resemble a pulse, changing quickly and preceding the general feeling of the condition. And there are indicators that resemble a medical report, issued only after the condition has become clear. In between are indicators that describe the moment, but they alone are not enough to know the upcoming direction. Hence the difficulty of reading the economy emerges; the problem is not in the abundance of numbers, but in the confusion between the timing of each indicator, its function, and its speed of appearance in the present.

Slow or lagging indicators, such as GDP, unemployment, and debt-to-GDP ratios, are important because they provide a broad and deep picture, but they usually come after the impact has occurred. If demand slows today, its full effect will not appear in GDP until later, and it will not appear in unemployment until after companies decide to stop hiring or reduce staff. Therefore, these indicators alone are not suitable for detecting a turning point early, but they are suitable for confirming it.

In contrast, there are faster indicators, such as purchasing managers' indices, business confidence, new orders, financing costs, credit movements, and asset prices. These do not always confirm that growth has occurred or that a recession has begun, but they alert to a change in behavior. If factory orders decline, or business confidence weakens, or the cost of debt rises, these are signals that may precede the impact on profits, jobs, and output.

As for coincident indicators, such as monthly inflation, industrial production, retail sales or spending, they stand in the middle; they describe what is happening now, but they need context that encompasses the overall picture for their reading to be realistic.

Therefore, combining indicators is not about putting them in a table and taking a summary, but rather arranging them temporally. We start by asking: Does the indicator lead the cycle or lag behind it? Then we ask: Is the signal sectoral or broad? Then: Has it moved from confidence and orders to production, and from production to credit and jobs? Only then does economic reading become closer to diagnosis, not impression.

The latest Saudi figures provide an example: real GDP growth of 3% in the first quarter, Saudi unemployment at 6.4%, and inflation at 1.8% do not paint a picture of an economy leaning toward recession. But at the same time, they do not indicate a disparity in sectoral performance and that they are not moving with the same momentum.

When industrial production declines by 18.7% in May, the figure appears striking at first glance, but reading it without decomposition is misleading, especially in an economy whose industrial production is affected by oil movements. Here, to reach a conclusion, it is not enough to ask: Is the number negative? Rather, is the weakness oil-related or non-oil? Monthly or annual? Temporary or prolonged? And which components had the greatest impact on the outcome?!

Because in contrast, the business confidence index remained above neutral, and the purchasing managers' index is moving in the expansion zone, the message is not 'nothing striking,' but rather that the striking signal has not yet turned into a slowdown. A slowdown is not generated from a single indicator, but from the transmission of weakness among indicators: from demand to production, from production to income, from income to jobs and credit.

Therefore, the investor picks up the fast indicators because markets are always faster in movement, and the opportunity at its beginning emerges from the sum of fast indicators and tracking their temporal transition. Governments deal with confirmed indicators, which are usually slow but certain. The trader deals with a mix of them to adjust his strategic plans. Therefore, one number is not enough, and one indicator is not sufficient for making a decision.

CEO of Investment at BLME