Forecasting Techniques One of the most basic methods of forecasting is extrapolation . This simply involves projecting current trends into the future, whether it be through the use of moving averages, or seasonal patterns of the available data. While these techniques may seem overly simple, in some situations, they may yield sufficient answers and may be as accurate a forecast as those resulting from more complicated approaches.
Opinion surveys represent another forecasting technique.
This technique amounts to asking businesses and consumers what they think is going to happen. The trouble with this approach is that good surveying can be expensive the larger the sample gets and it sometimes takes a large sample to achieve the desired degree of accuracy. More sophisticated econometric techniques can also be used to forecast economic conditions. Barometric Forecasting Methods One forecasting approach that is well suited to the leading indicator's job of signaling changes in direction is barometric forecasting . This approach rests on the logic that key current developments can serve as a barometer of the future, if the key developments can be identified and put into the form of a statistical time series.