Fuzzy Trends in Business Activity Forecasting

Business forecasting is usually encumbered with a considerable risk of error. The risk can be diminished by demarcation of fuzzy trends. Forecasting within a certain interval increases the probability that the expected value will fall into the foreseen interval. The above method has been applied to forecat the situation in Poland's manufacturing and construction on the basis of survey data. The results for the first quarter of 1994 point to a considerable indefiniteness of the situation in food industry and in construction. This is a result of the high degree of dependence of those sectors upon external factors. The forecasting method discussed in the article is subject to some constrains, such as the assumption of linear additive relationships. When the relationship between the explanatory and explained variables are not linear, the above method proves inefficient