Future Toolkit

The "Sentinel" tree on the Mitchell River, Bairnsdale, Victoria, before and during the June 2007 east coast low flood.

Photos by Charlie Nelson and Malcolm Ross

Forecasting books

Leading indicators for consumer spending in Australia

WEF Global Risks 2016 report

A world of peaks

Prophets Profit - articles about the future





The objective of Future Toolkit is to improve the quality of decisions about the future.

Developed by Charlie Nelson.

Forecasting: the essential skills
A new book aimed at improving forecasting accuracy.

The book is about forecasting skills in two senses:

  • Forecasting skill is a measure of the extent to which forecasts are more accurate than those produced by naive methods such as trend extrapolation.  The book aims to improve skill in this sense.

  • There is a range of skills needed by the individual or the team making forecasts and the book identifies theses skills through evaluation of forecasting performance in several fields and through case studies.  The skills span a wide range including  knowledge, experience, and ways of thinking.

Part 1 contains a chapter on the costs of forecasting inaccuracy and seven forecasting case studies.  The case studies cover new vehicle sales, retail sales, supermarket sales, the development of a leading index for household consumption growth, decadal forecasting of rainfall, using scenarios to predict an economic shock, and predicting market share loss for a monopoly when the market is opened to competition.

Part 2 evaluates forecasting skill of economic and exchange rate forecasting and identifies ways to improve.

Part 3 describes a range of forecasting techniques, their strengths and weaknesses, and considerations in choosing and using techniques.

Part 4 discusses risk and uncertainty in forecasting, along with implications for planning.

Part 5 provides extended coverage and a case study on forecasting with the Wisdom of the Masses.  The case study shows the potential for the Wisdom of the Masses to forecast GDP growth more accurately than professional economists.

Part 6 discusses the skills needed for improving forecasting accuracy.

The book of over 120 pages is now available online.

I am a statistician with over 40 years practical experience in forecasting.

This page updated February 2016