By Karin van Wyk
An economist is an expert in the study of the production, distribution and application of resources who provides clients with support, advice and information about global and domestic economic prospects, says Christo Luüs of Absa Group Economic Research. This includes the identification of threats and opportunities in the business environment and economy at large. Sometimes an economist would also monitor, report on and, where possible, influence developments and government policy in his or her particular field of involvement.
Economics is a wide field with a variety of applications, and economists may be employed in a range of fields in both the private and public sectors. A macro economist will concentrate on the economy as a whole and could be employed by financial institutions such as banks or life assurance companies, in the manufacturing or retail trade sectors, or at the Reserve Bank and government departments. Forecasting of economic and demand / supply conditions within sectors or enterprises are widely used to optimally employ resources and assist in budgeting, planning and strategic processes. In the financial environment, an economist’s input may be used to improve the investment performance of institutional or private client portfolios.
At the SA Reserve Bank (SARB), which arguably is one of the biggest employers of economists, often enroll them into their accelerated management program and afford them the opportunity to be deployed in various research, administrative, and management functions. At the SARB, an economist will learn how to collect and process important economic data into a meaningful format. The SA Reserve Bank Quarterly Bulletin serves as a very important source of information for economists at all levels and in all sectors, and assist policymakers in reaching decisions.
In the private sector, economists interpret and predict trends for use by clients and/or management. A trainee economist at Absa Group Economic Research must typically learn the ropes on where to source data and how to manipulate these into useful information. At the same time this will assist the person in embedding a mental model of the working of the economy. The trainee economist should be critical from the outset and have an eye for detail. What are behind the figures and the graphs? What factors are driving the magnitudes under review and what are the causalities? From the outset, a trainee economist must be able to handle calculations such as percentage changes, seasonal adjustments, annualisation, smoothing techniques, regression analysis, etc. He/she must also be able to establish whether a trend exists or whether there is a cycle within a long-term trend.
Once a trainee economist has obtained sufficient experience in data manipulation, the economist should gain experience in researching specific sectors, issues, or topics. The range of issues that an economist might be asked to investigate is very wide indeed. Examples include the studying of the forward and backward linkages in pertaining to the gold mining sector; what the impact of altered tariffs on the clothing sector would be; identifying the factors that will be driving earnings growth on the JSE; what the economy-wide impact of an oil price shock could be; or what the effect of a flat rate of tax on growth in the economy would be. Such research might form part of the operational and strategic decision-making of an enterprise, as a research topic for an academic journal, or as an input into the formulation of economic policy by the government.
The economist should finally be able to present his/her findings and research in a well-structured manner in a report or publication. He should always be conscious of the level of technicality that his audience possesses. Verbal communication (i.e. presentations) and face-to-face discussions with clients is another important skill that an economist has to master.
As the economic field is so wide and the jobs so varied, various personality and temperament types can be accommodated in different roles. The more analytical personality that shuns publicity may fulfill a background role of “number crunching” while the more extroverted economists may enjoy the public relations, networking, marketing and social aspects relevant to certain economist positions.
For interesting articles about the economist as a profession please see the website of the National Association of Business Economists www.nabe.com