REYKJAVIK, Iceland, June 18, 2015 (GLOBE NEWSWIRE) -- The Iceland Composite Leading Indicator (CLI) remained unchanged for the month of May following a drop of 0.1 percent in April. The CLI still indicates growth above long term trend.
The unchanged level of the CLI can mostly be attributed to a drop in consumer confidence relative to the long term trend. There continue to be indications of healthy growth in domestic demand. Merchandise imports are growing at a brisk pace and debit card turnover is on the rise. The number of tourist arrivals is again rising strongly following a dip in April. The main risk factors to the still positive outlook include some external factors mainly in relation to the geopolitical situation. Also, the full impact of the recently concluded strikes is still unclear.
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 May five of the six underlying components are strengthening year on year. However, two 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 May is unchanged on the month at 101.5. This value serves as an indicator to economic activity six months into the future, i.e. November 2015. 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 | |||||||||
| May | 100.8 | -0.1 | % | -0.2 | % | Nov. | |||
| June | 100.6 | -0.2 | % | -0.5 | % | Dec. | |||
| July | 100.3 | -0.2 | % | -0.8 | % | Jan. 2015 | |||
| August | 100.2 | -0.1 | % | -1.1 | % | Feb. | |||
| September | 100.3 | 0.1 | % | -1.2 | % | March | |||
| October | 100.5 | 0.2 | % | -1.0 | % | April | |||
| November | 100.8 | 0.3 | % | -0.7 | % | May | |||
| December | 101.1 | 0.3 | % | -0.2 | % | June | |||
| 2015 | |||||||||
| January | 101.3 | 0.3 | % | 0.3 | % | July | |||
| February | 101.6 | 0.2 | % | 0.6 | % | August | |||
| March | 101.6 | 0.1 | % | 0.7 | % | Sept. | |||
| April | 101.5 | -0.1 | % | 0.6 | % | Oct. | |||
| May | 101.5 | 0.0 | % | 0.7 | % | Nov. | |||
The June Composite Leading Indicator is scheduled for release on July 20, 2015.