NISM Series XV : Research Analyst Certification Exam Notes
Page 33 Of 62
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Economic trends can be broadly classified into secular, cyclical and seasonal trends.
Secular trends refer to long term change that is occurring in the economy or industry. They create displacement in goods or services being consumed or the manner in which they are produced.
Example of secular trend - digitalization of office space - consumption of papers and ink going down. Secular trends are often driven by disruptions caused by change in technology, culture, demography, and consumer preferences among other factors. Secular trends often causean inflection in the business lifecycle of an industry.
cyclical trends refer to temporary trends that affect the quantity of goods and services being consumed. Cyclical trends eventually reverse only to return and reverse again. Cyclical trends can be observed at many different levels: a) Economic cycle b) Commodity cycle c) Inventory cycle
Seasonal trends are highly predictable pattern in the production and consumption of goods and services.
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