Diffusionsindex

Diffusionsindex, often translated as diffusion index, is a statistical measure used to summarize the breadth of change across a set of indicators or survey responses. It is designed to capture how widely signals are moving in a given direction, rather than the magnitude of change in any one item. In practice, researchers apply the diffusion index to surveys or panels that classify responses into categories such as improving, unchanged, or deteriorating.

Calculation methods vary by dataset, but a common approach is to compute the proportion of indicators showing improvement plus half the proportion showing no change, producing a value between 0 and 100. Some implementations weight changes differently or treat only improving indicators as positive, but the core idea remains to reflect breadth rather than depth. Because of these variations, diffusion indexes are usually interpreted in relation to a neutral threshold, often 50, where values above indicate net expansion and values below indicate net contraction.

Diffusionsindex is widely used in macroeconomics and business statistics. It appears in surveys that track overall business conditions, supply chains, or industry activity. The diffusion index is a convenient summary that complements more detailed measures by indicating whether a broad set of indicators moves in the same direction. A higher diffusion index suggests a wider spread of positive signals, while a lower index signals more widespread negative signals.

Limitations include sensitivity to the chosen indicators and categories, and the fact that the index expresses breadth rather than the intensity of change. As a result, diffusion indexes are often used alongside depth measures and other indicators to provide a fuller picture of economic conditions.