REYKJAVIK, Iceland, April 19, 2016 (GLOBE NEWSWIRE) -- The Analytica Composite Leading Indicator (CLI) for Iceland continued its rise in March, now by 0.2 percent on the month, following a rise 0.3 percent in February. The value of the indicator in upswing has not been higher since 2006. The CLI indicates growth above long term trend.
As before the rise of the March CLI can be attributed to a strong growth in tourist arrivals, a rise in debit card turnover and increased fish catches. The trend in tourist arrivals indicates strong growth this year. The main risk factors to the still positive outlook continue to include some external factors mainly in relation to the geopolitical situation and growth prospects for emerging markets and China.
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 March 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 March rises by 0.2 percent on the month to 103.2. This value serves as an indicator to economic activity six months into the future, i.e. September 2016. A value of 100 indicates GDP in line with its long term trend.
| Table 1. Analytica's CLI 2015-2016 | |||||||||
| Change in % | Indication | ||||||||
| Index | on month | YOY | for month | ||||||
| 2015 | |||||||||
| March | 100.3 | 0.0 | % | 0.1 | % | Sept. | |||
| April | 100.3 | -0.1 | % | 0.0 | % | Oct. | |||
| May | 100.3 | 0.1 | % | 0.2 | % | Nov. | |||
| June | 100.5 | 0.2 | % | 0.7 | % | Dec. | |||
| July | 100.9 | 0.4 | % | 1.3 | % | Jan. 2016 | |||
| August | 101.3 | 0.4 | % | 1.9 | % | Feb. | |||
| September | 101.6 | 0.3 | % | 2.3 | % | March | |||
| October | 101.8 | 0.2 | % | 2.4 | % | April | |||
| November | 102.1 | 0.3 | % | 2.5 | % | May | |||
| December | 102.4 | 0.3 | % | 2.6 | % | June | |||
| 2016 | |||||||||
| January | 102.7 | 0.3 | % | 2.6 | % | July | |||
| February | 103.0 | 0.3 | % | 2.7 | % | August | |||
| March | 103.2 | 0.2 | % | 2.8 | % | Sept. | |||
The April Composite Leading Indicator is scheduled for release on May 17, 2016.