The Central Florida Business economic index is a measure of the region's economy that takes into account local variables in six counties.
It was modeled by M.G. Lewis Econometrics in Winter Park on more than five years of economic information supplied by a variety of sources. It is designed to reflect increases or decreases in the regional economy and in the individual counties.
''We constructed it with as much local data as we could,'' said Pamela Schenker, vice president of M.G. Lewis.
Because some of the information lags behind, the index will use historical information to project where the index is likely to stand in coming months. For instance, the index stood at 134.92 at the end of March and is forecast to be 134 during July, based on past downturns that have occurred during the summer.
In its methodology, the index is similar to those done by several private and governmental agencies, such as the Consumer Price Index and the index of leading economic indicators.
The index will appear monthly in Central Florida Business, generally on the first Monday of the month. On the other Mondays, CFB will publish the raw, county-by-county statistics from which the index is derived.
The index uses January 1981 as its base of 100.
''The numerical value of the index doesn't mean anything,'' Schenker said. ''The direction is what matters. It can also be informative in comparing one area to the other.''
The index is weighted to reflect the relative sizes of the economy in the six counties, but it is not adjusted for seasonality. That means that the most significant comparisons should be made from the same month of one year to another, rather than from month to month.
The index components are as follows:
-- Employment force. This statistic from the Florida Department of Labor shows the size of the working population of the region and its six counties.
-- Gallons of gasoline sold. Gathered by the Florida Department of Revenue, this information is considered an indicator of both the strength of the local economy and of the tourism economy because both are big users of automobiles. Although there is some price elasticity (when the price goes way up, people tend to conserve), it is considered an accurate barometer of the economy.
-- Tourist tax collections. In an area such as Central Florida, this information from the Department of Revenue will show the strength of one of the major components of the local economy. Orange, Volusia, Osceola and Lake counties collect a tourist tax. Seminole and Brevard counties do not.
-- Electric meters. Utility hookups are a sign of the underlying strength or weakness of the resident economy. In a fast-growing area like Central Florida, this information gathered from area utilities is an accurate gauge of the pace of the growth.
-- Residential building permits. Because permits are pulled for future construction, this indicator is a sign post of the confidence that local builders have in the economy. However, construction is very interest rate- sensitive, and this statistic, provided by the Bureau of Economic Research at the University of Florida, tends to fluctuate more than the others.