Construction of real-time manufacturing industry production activity estimation models using high-frequency electricity demand data

Abstract

In this paper we describe how we estimated production activity in the manufacturing industry in Japan by analyzing the characteristics of fluctuations in the high-frequency electricity demand data published by major Japanese electric power companies, on the basis that the manufacturing industry consumes electricity when carrying out production activity. We constructed mathematical models to estimate production activity in each area of Japan on the basis of electricity data provided by multiple electric power companies, and then combined the estimates generated by these models to estimate production activity in Japan as a whole. The industrial production index published by Japan's Ministry of Economy, Trade and Industry (METI) is an example of government data that reflects production activity in the manufacturing industry. However, the industrial production index for a particular month is not published until the end of the following month, so there is something of a time lag between the production activity itself and the publication of this government data. The method we set out in this paper makes it possible to estimate manufacturing industry production activity around one month before METI's industrial production index is published through the use of highly timely electricity demand data. Furthermore, the industrial production index is normally calculated on a monthly basis, but in this paper, by taking advantage of the high degree of time granularity of the electricity demand data we use, we are able to present a mathematical model that generates highly timely estimates on a weekly basis.