REYKJAVIK, Iceland, Sept. 28, 2016 (GLOBE NEWSWIRE) -- The Analytica Composite Leading Indicator (CLI) for Iceland rose in August. However, there were some downward revisions for previous months. The CLI still indicates growth above long term trend.
Three of the six components rise on the previous month, i.e. merchandise imports, the Gallup Index of Consumer Confidence and the value of fish catches. The remaining components contract. All the components are adjusted for seasonality and long term trend. The largest impact is due to increased fish catches and imports. There is still strong growth in tourism on the year. An upward revision is made in the long term trend estimate of most CLI components. The main risk factors 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 August 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 August rises by 0.1 per cent to 101.7. This value serves as an indicator to economic activity six months into the future, i.e. February 2017. 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 | |||||||||
| August | 100.9 | 0.4 | % | 1.7 | % | Feb. 2016 | |||
| September | 101.1 | 0.2 | % | 2.1 | % | March | |||
| October | 101.3 | 0.2 | % | 2.2 | % | April | |||
| November | 101.6 | 0.3 | % | 2.3 | % | May | |||
| December | 101.8 | 0.2 | % | 2.3 | % | June | |||
| 2016 | |||||||||
| January | 102.0 | 0.2 | % | 2.2 | % | July | |||
| February | 102.1 | 0.1 | % | 2.2 | % | August | |||
| March | 102.0 | 0.0 | % | 2.1 | % | Sept. | |||
| April | 101.9 | -0.1 | % | 2.0 | % | Oct. | |||
| May | 101.8 | -0.1 | % | 1.8 | % | Nov. | |||
| June | 101.7 | -0.1 | % | 1.5 | % | Dec. | |||
| July | 101.6 | 0.0 | % | 1.1 | % | Jan. 2017 | |||
| August | 101.7 | 0.1 | % | 0.9 | % | Feb. | |||
The September Composite Leading Indicator is scheduled for release on October 18, 2016.