This article explores the development of composite coincident indexes summarizing the condition of the economy of New England and its six states. The authors conclude that continued attempts to construct coincident economic indexes at the regional level are worthwhile, for several reasons.
A widely accepted and used index for the region does not exist, although recent advances in statistical methodologies make such indexes possible and practical. Second, the indexes presented are in accord with what knowledgeable observers believe about the New England economy and are less noisy than the observable data from which they are generated. Their timeliness may at least partially fill the information gap created by the lag in regional statistics, especially with regard to personal income and gross state product. Finally, a methodology similar to the one employed in this paper could be used in the development of additional indexes of regional activity that could help in either analyzing current conditions or making forecasts.