REYKJAVIK, Iceland, Aug. 20, 2013 (GLOBE NEWSWIRE) -- The Iceland Composite Leading Indicator (CLI) declined slightly in July to 102.5 from a revised June value of 102.7. The indicator published by independent advisory company Analytica, is designed to anticipate turning-points in economic activity relative to trend. The indicator continues to point to increased activity in the fall.
For the year as a whole the indicator points to Icelandic growth to remain relatively weak. The current estimate for 2013 growth is still in the range of 1-2 per cent. It is not yet clear whether the CLI decline can be taken to signify a reversal of economic activity in 2014.
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 five of the six underlying components are strengthening. The number of tourists visiting Iceland is still on the rise. However, there is a slight contraction of merchandise imports.
Table 1 shows the development of the CLI during the past twelve months. The July value declines by 0.1 per cent to 102.5. This value serves as an indicator to economic activity six months later, i.e. January. A value of 100 indicates GDP in line with its long term trend.
| Table 1. Analytica's CLI 2012-2013 | ||||
| Change in % | Indication | |||
| Index | on month | YOY | for month | |
| 2012 | ||||
| July | 102.3 | 0.2% | 3.1% | Jan. 2013 |
| August | 102.4 | 0.1% | 2.9% | Feb. |
| September | 102.3 | -0.1% | 2.7% | March |
| October | 102.2 | -0.1% | 2.4% | April |
| November | 102.1 | -0.1% | 2.0% | May |
| December | 102.1 | 0.0% | 1.6% | June |
| 2013 | ||||
| January | 102.3 | 0.2% | 1.4% | July |
| February | 102.5 | 0.3% | 1.4% | August |
| March | 102.8 | 0.3% | 1.4% | Sept. |
| April | 103.0 | 0.2% | 1.4% | Oct. |
| May | 102.9 | -0.1% | 1.0% | Nov. |
| June | 102.7 | -0.2% | 0.5% | Dec. |
| July | 102.5 | -0.1% | 0.2% | Jan. 2014 |
The August CLI is planned for release on 9/20/2013.