GlobeSt.com: How does it work?

Twist: The IBI collects primary data from geographically diverse industrial facility customers who represent a wide variety of "on the ground" business sectors moving inventory through the global supply chain. The IBI consists of two indexes: an overall business activity index and a distribution space utilization index. Index values above 50 represent expansion and values below 50 represent contraction. Both indices are individually tabulated for AMB's markets and industry groups within our customer base. The responses include the collective insights from corporate contacts as well as from on-site industrial users; the indices have averaged more than 350 participants per month.

GlobeSt.com: What makes the AMB IBI different from other indicators?

Twist: The most basic difference is that we have a very diverse tenant base. A lot of other indices are just certain sectors. But we have retailers, suppliers, distributors, service sector companies, government agencies, educational organizations, warehouse companies. We can segment by industry, but we aren't limited to a particular industry. We can break it down by individual metro areas, or we can look overall. Also, we look at both space utilization and business activity and see how they interact. Most other macro indicators have a much narrower focus. Our data is also very timely. The October IBI is based on data gathered in October.

GlobeSt.com: How well has the indicator performed?

Twist: It is very highly correlated with economic conditions. Of greatest significance, the IBI leads net industrial space absorption by a quarter with a correlation of 97% and an R2 of .93 and seaborne container volume by one month with a correlation of 85% and an R2 of .73. From July-September 2007, the business portion of the survey averaged 60.1, which indicated strong expansion in business activity. The space survey averaged 56.3 over that same period, coinciding with observed levels of healthy industrial space absorption. Both indices dipped significantly starting in November—just before the national economy started to contract. We believe that the IBI signaled the start of the recession when it fell below 50 in December 2007. It wasn't until December 2008 that the National Bureau of Economic Research pronounced December 2007 as the official beginning of the recession. The index stood at an all-time low in February of 2009, with business activity and space utilization measuring record lows of 31.1 and 36.4, respectively. Since February, the index has exhibited an upward trend in conjunction with an improving economy.

GlobeSt.com: How often will the indicator come out?

Twist: We have the data every month. But we're not 100% certain how often we will release it. Probably quarterly. The next release should be February.