REYKJAVIK, Iceland, Aug. 18, 2015 (GLOBE NEWSWIRE) -- The Iceland Composite Leading Indicator (CLI) rose by 0.3 percent for the month of July following a rise of a 0.2 percent in June. The value of the indicator in upswing has not been higher since 2006. The CLI still indicates growth above long term trend.
The rise of the June CLI can be attributed to a rise in consumer confidence and an increase in domestic debit card turnover and in the value of fish catches. There continue to be indications of healthy growth in domestic demand and a strong growth in tourist arrivals. The main risk factors to the still positive outlook include some external factors mainly in relation to the geopolitical situation. Russia has imposed a ban on Icelandic fish imports but the impact is not visible in the data as yet.
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 July all 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 July rises by 0.3 percent on the month to 101.9. This value serves as an indicator to economic activity six months into the future, i.e. January 2016. A value of 100 indicates GDP in line with its long term trend.
| Table 1. Analytica's CLI 2014-2015 | |||||||||
| Change in % | Indication | ||||||||
| Index | on month | YOY | for month | ||||||
| 2014 | |||||||||
| July | 100.3 | -0.3 | % | -0.8 | % | Jan. 2015 | |||
| August | 100.1 | -0.2 | % | -1.1 | % | Feb. | |||
| September | 100.1 | 0.0 | % | -1.3 | % | March | |||
| October | 100.3 | 0.2 | % | -1.1 | % | April | |||
| November | 100.6 | 0.3 | % | -0.7 | % | May | |||
| December | 100.9 | 0.3 | % | -0.2 | % | June | |||
| 2015 | |||||||||
| January | 101.1 | 0.3 | % | 0.2 | % | July | |||
| February | 101.3 | 0.2 | % | 0.5 | % | August | |||
| March | 101.4 | 0.1 | % | 0.5 | % | Sept. | |||
| April | 101.3 | -0.1 | % | 0.5 | % | Oct. | |||
| May | 101.4 | 0.0 | % | 0.6 | % | Nov. | |||
| June | 101.6 | 0.2 | % | 1.0 | % | Dec. | |||
| July | 101.9 | 0.3 | % | 1.6 | % | Jan. 2016 | |||
The August Composite Leading Indicator is scheduled for release on September 18, 2015.