REYKJAVIK, Iceland, March 20, 2014 (GLOBE NEWSWIRE) -- The Iceland Composite Leading Indicator (CLI) continued to rise in February. This is the eighth consecutive rise of the CLI. The indicator published by independent advisory company Analytica, is designed to anticipate turning-points in economic activity relative to trend. The indicator points to continued growth in the months ahead.
Economic growth in 2013 was 3.3 percent driven by growth in tourism. It looks like 2014 is starting on a strong note and growth this year could be in the range 2.5-3.5 percent. There are indications that domestic demand is picking up and there is even stronger growth in tourist arrivals than a year ago. However, there is a contraction in fish catches as capelin catches collapse.
Turning points of the CLI tend to precede turning points in economic activity relative to trend by approximately six months. Economic activity is measured by Gross Domestic Product (GDP) published by the Statistical Bureau of Iceland. The calculation of Analytica's CLI is based on methodology adopted by the OECD.
There are six components of Analytica's CLI. These are: Fish catches, inflation adjusted debit card turnover, number of tourists visiting Iceland, the MSCI World equities index, inflation adjusted imports and the Gallup Index of Consumer Confidence. For February three of the six underlying components are strengthening year on year. However, four of the six components rise on the previous month.
Table 1 shows the development of the CLI during the past twelve months. The February value rises by 0.3 percent on the month to 102.9. This value serves as an indicator to economic activity six months into the future, i.e. August. A value of 100 indicates GDP in line with its long term trend.
| Table 1. Analytica's CLI 2013-2014 | ||||
| Change in % | Indication | |||
| Index | on month | YOY | for month | |
| 2013 | ||||
| February | 101.4 | 0.2% | 0.6% | August |
| March | 101.6 | 0.2% | 0.6% | Sept. |
| April | 101.7 | 0.1% | 0.4% | Oct. |
| May | 101.5 | -0.1% | 0.1% | Nov. |
| June | 101.4 | -0.1% | -0.3% | Dec. |
| July | 101.5 | 0.1% | -0.5% | Jan. 2014 |
| August | 101.7 | 0.2% | -0.3% | Feb. |
| September | 102.0 | 0.3% | 0.1% | March |
| October | 102.3 | 0.2% | 0.7% | April |
| November | 102.3 | 0.1% | 1.0% | May |
| December | 102.4 | 0.0% | 1.2% | June |
| 2014 | ||||
| January | 102.6 | 0.2% | 1.3% | July |
| February | 102.9 | 0.3% | 1.4% | August |
The March Composite Leading Indicator is scheduled for release on April 23, 2014.