Wassup Economy!

A Close Look on Economic Trends through the Search Glass

A lot is being said these days on India's economic growth and progress. There is a fair amount of negativity in the recent times especially when it comes to macroeconomic patterns. Lets look at these  patterns from an interesting lens- Google search.

Why Google search-

The search box is a reflection of demand. People type in what they are interested in and trying to find more about. From online shopping to bollywood celebrities, its a reflection of what 150 million people in India are looking for. Hence it can estimate and predict the ground reality in many ways. 

Google Trends is a free google tool available online which allows us to look at searched topics and their patterns overtime. Lets look at the demand for key economic indicators in India and see if the economy is really going up or down.

Here we analyse Google trends for the last 10 years and see how economic indicators have progressed over the years. Remember, the number of internet subscribers in India grew more than 3 times over these years and so the hypothesis is searches should also grow three times to be consistent with the expanding user base.

1. Real Estate-

People's interest in buying their homes is a strong indicator of economic progress and new home sales forms a considerable portion in the GDP. Lets see how this stacks up on Google search over the last 10 years-

Searches for "buy house" and related variants showed a peak till about mid 2010 and since then has fallen considerably before showing marginal improvement in 2013 mid. On the other hand searches for "home loans", show a disproportionate fall indicating falling interest levels in buying new homes and properties 

So in the real estate world, things have certainly taken a hit as far as the consumer interest is concerned on Google search. Yet the real estate prices in major cities have shown an increase?

2. Consumer Savings-

In a falling economy, people are hesitant to spend more and tend to go for saving their money rather than spending it on goods and services. Trends for "Fixed Deposits" show an interesting trend where we see a sharp increase in interest over the years. Clearly search trends indicate increasing interest in savings till about start of 2011.

3. Automobile Sales-

Higher the auto sales, more money people have to spend and less hesitant they are to go ahead and splurge it on the machine of their choice. It's no secret that auto sales have taken a hit after the fuel price  hike and falling rupee. It clearly shows on Google search trends where searches for "car prices" shows a sharp decline after 2010-

and an even disproportionate fall in searches for "Car Loans".

4. Jobs and Education-

Unemployment is probably the biggest indicator of a weak economy and there are 2 instances when people look for jobs- When they don't have one or when they want a better one. 

Lets see an instances where people don't have one. Searches for "fresher jobs" grew since 2004 till about 2010 before falling again indicating on a whole more freshers are looking for jobs than ever, maybe a sign of unemployment?

On the other hand, interest in education especially higher education has shown a sharp fall- definitely not a good sign. Here we see trends for "mba" and "education loans".

5. Communication-

Not a direct indicator of economic growth but definitely a key indicator of how our government has performed when it comes to connecting people and developing the communication infrastructure. Searches for mobile phones one, in a country with ever increasing mobile penetration, would assume will show a spike atleast. Well this was true till about 2010 mid but surprisingly this also has shown a sharp decline post that- strange, isn't it?

Broadband penetration in the country is yet to pickup and that is very well reflected in the Google search box-

6. Other spending areas-

One of the biggest ecommerce platform on the internet is travel. Huge amounts of ticket bookings and travel research is done online. Increasing travel patterns also indicate rise in disposable income- overall a good sign for the economy. Overall searches for "air tickets" grew till about 2009 end but since then has shown sharp decline. Yet another sign that all is not well.

To Sum Up

Clearly trends are depressing and so is the mood. Hope things improve soon and we see these demand patterns rise like they should in a developing country like ours. 

Meanwhile, searches for "Salman Khan" keep going higher and higher :)

Disclaimer: The views are completely my own. Actual facts may vary.