REYKJAVIK, Iceland, Sept. 20, 2013 (GLOBE NEWSWIRE) -- The Iceland Composite Leading Indicator (CLI) declined in August to 101.7 for the fourth consecutive month. The indicator published by independent advisory company Analytica, is designed to anticipate turning-points in economic activity relative to trend. According to the indicator the probability of contraction in the months ahead has not been higher since 2007.
For the year 2013 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.
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 three of the six underlying components are weakening year on year. However, five of the six components weaken on the previous month.
Table 1 shows the development of the CLI during the past twelve months. The August value declines by 0.3 per cent to 101.7 from a downwardly revised July value of 102.0. This value serves as an indicator to economic activity six months into the future, i.e. February. 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 | ||||
| August | 102.5 | 0.1% | 3.0% | Feb. 2013 |
| September | 102.4 | 0.0% | 2.8% | March |
| October | 102.3 | -0.1% | 2.5% | April |
| November | 102.2 | -0.1% | 2.1% | May |
| December | 102.2 | 0.0% | 1.7% | June |
| 2013 | ||||
| January | 102.4 | 0.2% | 1.6% | July |
| February | 102.7 | 0.3% | 1.5% | August |
| March | 102.9 | 0.2% | 1.5% | Sept. |
| April | 103.0 | 0.1% | 1.4% | Oct. |
| May | 102.8 | -0.2% | 0.9% | Nov. |
| June | 102.4 | -0.4% | 0.2% | Dec. |
| July | 102.0 | -0.3% | -0.3% | Jan. 2014 |
| August | 101.7 | -0.3% | -0.7% | Feb. |
The September CLI is planned for release on 10/21/2013.