REYKJAVIK, Iceland, Nov. 18, 2014 (GLOBE NEWSWIRE) -- The Iceland Composite Leading Indicator (CLI) rose by 0.4 percent in October. The indicator, published by independent advisory company Analytica, is designed to anticipate turning-points in economic activity relative to trend.
It appears that growth will be somewhat slower during the second half of the year than a year ago. However, the CLI hints at growth picking up again in early 2015.
A greater number of the CLI components rose in October than a month ago. The inflation adjusted debit card turnover as well as merchandise import volumes are on the rise. Also, fish catches are increasing. Consumer confidence changed little in October. However, it has improved on the year, mostly due to improved confidence during the first quarter. Tourism is growing at a brisk pace. Even so, it seems unlikely that the number of tourists will rise as much in the last quarter as one year ago.
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 October five of the six underlying components are strengthening year on year. However, three of the six components rise on the previous month.
Table 1 shows the development of the CLI during the past twelve months. The value for October rises by 0.4 percent on the month to 101.2. This value serves as an indicator to economic activity six months into the future, i.e. April 2015. 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 | ||||||||
| October | 101.9 | 0.1% | 0.7% | April 2014 | ||||
| November | 101.8 | -0.1% | 0.9% | May | ||||
| December | 101.6 | -0.2% | 0.9% | June | ||||
| 2014 | ||||||||
| January | 101.4 | -0.2% | 0.8% | July | ||||
| February | 101.3 | -0.1% | 0.6% | August | ||||
| March | 101.4 | 0.0% | 0.4% | Sept. | ||||
| April | 101.3 | -0.1% | 0.1% | Oct. | ||||
| May | 101.1 | -0.2% | -0.1% | Nov. | ||||
| June | 100.9 | -0.2% | -0.3% | Dec. | ||||
| July | 100.6 | -0.2% | -0.7% | Jan. 2015 | ||||
| August | 100.6 | 0.0% | -0.9% | Feb. | ||||
| September | 100.8 | 0.2% | -1.0% | March | ||||
| October | 101.2 | 0.4% | -0.7% | April | ||||
The November Composite Leading Indicator is scheduled for release on December 18, 2014.
Further information is provided by Analytica's CEO, Mr. Yngvi Hardarson
Tel. +354 5278890 - email: yngvi@analytica.is