Economics is famously the grey science, with a complex evidence base typically underpinning every argument and prediction. However, at least one highly regarded measure of economic sentiment has its origins in a throwaway quip.
When Australian economist Colin Dwyer developed the Crane Index in the early 2000s, he found inspiration in the words of former Queensland premier, Joh Bjelke-Petersen. Petersen had once claimed he didn’t need economists to gauge how the Brisbane economy was doing under his watch – all he needed was ‘to look out the window and count the cranes’.
Harbour pilots can gauge world trade by the lengths of the ladders they climb
Dwyer’s subsequent development of the Crane Index as a proxy for overall economic health has been replicated around the world. US-based property consultancy RLB is among those following the method in its purest form. The firm issues a biannual Crane Index counting the number of construction cranes in regions around the world.
Its Q3 2025 US survey warns of a transitional phase in the economy with media outlet Construction Forum reporting an industry insider commenting: ‘The cranes tell a clear story – opportunity is still out there, but it’s no longer everywhere.’
Unlikely signals
Other proxy measures of economic health include shipping ladders and cardboard boxes. Econfix reports that harbour pilots can gauge the state of world trade by the lengths of the ladders they climb: the lower the ladder, the greater the load carried by cargo ships, the healthier the global economy. Demand for cardboard boxes, meanwhile, is watched keenly by some to assess rises and falls in consumer demand and corresponding manufacturing output.
Off-beat economic indicators (OEIs) have been gaining traction since The Economist originated the Big Mac Index in the 1980s, famously comparing the price of hamburgers across major world cities.
‘Men’s underwear sales in North America fell in 2008 and 2009, amid the global financial crisis’
While some, like the Crane Index, are based on simple if astute observation, others are tied to human psychology, coming to particular prominence in economically uncertain times.
Take the Men’s Underwear Index (MUI), an unlikely measure of economic sentiment until you consider the rationale behind it: during a recession, men will put off buying these essential but private garments and only resume purchasing them when their financial fortunes revive.
No less a figure than Alan Greenspan, the legendary former chair of the US Federal Reserve, was a proponent of the MUI, turning to drapery sales for signs of improving consumer sentiment during economic downturns. Fortune magazine reports that data bears out the thinking, noting ‘men’s underwear sales in North America fell in 2008 and 2009, amid the global financial crisis’.
Counter-cyclical indicators
Among the most intriguing of these ‘psychological’ OEIs are those that operate as counter-cyclical indicators (CCIs). These are typically ‘affordable luxuries’ that consumers seek out more frequently when bigger ticket items become out of reach, one of the most famous of which is lipstick.
‘The lipstick effect’ was coined by American economist Juliet Schor in 1998, based on her observation that women were willing to buy more expensive versions of this cosmetic staple during an economic downturn. Such purchases provide emotional compensation, ‘hope in a bottle’ as Schor put it, during turbulent times.
There are risks around oversimplifying data or being overtaken by events
The theory received a boost in 2001 when cosmetics firm Estée Lauder reported lipstick sales significantly up during the post-September 11 recession. ‘When lipstick sales go up, people don’t want to buy dresses,’ chairman Leonard Lauder, told the Wall Street Journal at the time.
Another well-regarded CCI is the Buttered Popcorn Index, with a track record going back to the most infamous economic downturn of all, the Great Depression of the 1930s. This indicator isn’t so much about snack choices, but the uptick in cinema attendance (and with it purchases of popcorn) as consumers seek out low-budget escapism when their finances take a hit.
Indicator limits
OEIs have their limits. Business Insider assembled a list of 40 back in 2013 and, while all had a basis in demonstrable fact, not all have stood the test of time.
The most obvious risks are around oversimplifying data or being overtaken by events themselves. The Big Mac Index fell out of favour when it was recognised that cost-of-living disparities played a role in food pricing across the world. Ireland found out the hard way during the financial crisis years that a proliferation of construction cranes might signal less an economy in good health and more a bubble about to burst.
That said, the strong imagery OEIs generate does add to their value. Deloitte, for example, produces a highly regarded annual Crane Survey for the UK and Ireland. However, the Big Four firm is upfront that while the cranes in this case are a pleasing metaphor, more conventional field work is the actual basis of its reports.
It is not always as simple as looking out the window
Arguably the most famous OEI hinges on a single event that may not have even happened. Joseph Kennedy, father of JFK, reputedly sold his stocks in 1929 after hearing shoeshine boys giving stock tips. If investment advice was that free flowing, he concluded, the economy must be completely overheated.
The story may be apocryphal, but the century since has seen the case for OEIs building. It is not always as simple as looking out the window, but it will always be about keeping an ear to the ground.
