Innovations in Global Performance Measurement: China's Scotch Whisky Indicator

As the global economy grows and converges, accounting, finance and economics struggle to come up with measures that capture the impact of the evolution from manufacturing to services and from domestic to digital.

It has become apparent that disparate and often seemingly indirect indicators - both lagging and leading - are emerging from the realm of transnational commerce and common experience.

And so it is with interest but not necessarily surprise that the following article explains the correlation between trends in Chinese scotch whisky consumption and broader measures of economic performance. This one in particular - combining trade, investments and consumer purchase behavior - underscores the importance of consumption patterns in driving broader socio-economic outcomes.

Consumers tend to drive growth in post industrial societies. Attempts to capture that sort of movement are could provide greater insight into the role that brand, reputation and other intangibles play in an increasingly service-oriented economy. All of which adds to our knowledge of human behavior and how it influences institutional resource allocation and public policy. More data and better decisions. We'll drink to that. JL

Linette Lopez reports in Business Insider:

It's not every day that the whisky industry, the mining industry, and fixed-asset investment (which slowed to 16.5% growth from 17%) are all screaming the same thing.
The Scotch Whisky Association published its global figures for the first half of this year, and consumption is way down in China.
Exports to Singapore and China dropped 46%, according to the organization. They declined 19.2% in the second half of 2013.
This jibes with the bad news we've been getting from the China's formal economic indicators. Earlier this month officials released the worst figures for industrial production since 2008. Retail, property, and a variety of other sectors of the economy also indicated a big slowdown was in the works.
The government responded with "targeted easing," not the full-scale stimulus we're used to seeing when Chinese growth slows.
That means industries including gambling — think Macau — and mining are preparing to take a hit as Chinese demand weakens. The market is already feeling it.
"A major contribution to the negative start to the week comes from mining sector under pressure overnight in Australia with names like BHP Billiton (BHP) and Rio Tinto (RIO) down over 2% after a decline in commodity prices and iron ore hitting fresh 5-year low, and the smaller producers hit even harder — all hurt by concerns about Chinese growth," Mike van Dulken, head of research at Accendo Markets, wrote on Monday.
It's not every day that the whisky industry, the mining industry, and fixed-asset investment (which slowed to 16.5% growth from 17%) are all screaming the same thing.
David Frost, chief executive of the Scotch Whisky Association, said: "We are confident that Scotch Whisky will continue to grow in the long-term as markets stabilize and new ones, such as emerging economies across Africa, open up. However, it is clear that in the short run that there are economic headwinds affecting exports."
He added: "The latest figures also act as a reminder that the success of Scotch whisky can't be taken for granted."
We couldn't agree more.