REYKJAVIK, Iceland, Oct. 18, 2017 (GLOBE NEWSWIRE) -- The Analytica Composite Leading Indicator (CLI) for Iceland rose in September for the second month in row - this time by 0.6 per cent. The value for August was revised downwards while earlier months were revised upwards. It is too early to tell whether the current CLI rise indicates the renewal of faster growth instead of growth normalization.
Three of the six components rise on the previous month. There is a rise in the value of fish catches, merchandise imports and the MSCI World equities index. The increasing value of fish catches constitutes the single largest factor contributing to the CLI rise. The long-term trend of some important CLI components remains strong. The main risk factors continue to include some external factors mainly in relation to the geopolitical situation. A prolonged government crisis following the elections on October 28 could produce a negative impact.
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 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 September, three of the six underlying components rise year on year. Also, 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 September rises to 100.1 or by 0.6 per cent. This value serves as an indicator to economic activity six months into the future, i.e. March 2018. A value of 100 indicates GDP in line with its long-term trend.
| Table 1. Analytica's CLI 2016-2017 | |||||||
| Change in % | Indication | ||||||
| Index | on month | YOY | for month | ||||
| 2016 | |||||||
| September | 101.2 | 0.0 | % | 0.5 | % | March 2017 | |
| October | 101.0 | -0.2 | % | 0.3 | % | April | |
| November | 100.7 | -0.3 | % | -0.2 | % | May | |
| December | 100.4 | -0.3 | % | -0.7 | % | June | |
| 2017 | |||||||
| January | 100.1 | -0.2 | % | -1.1 | % | July | |
| February | 100.2 | 0.1 | % | -1.1 | % | August | |
| March | 100.3 | 0.1 | % | -1.0 | % | Sept. | |
| April | 100.2 | -0.1 | % | -1.1 | % | Oct. | |
| May | 99.9 | -0.3 | % | -1.3 | % | Nov. | |
| June | 99.5 | -0.4 | % | -1.7 | % | Dec. | |
| July | 99.3 | -0.2 | % | -1.9 | % | Jan. 2018 | |
| August | 99.5 | 0.3 | % | -1.6 | % | Feb. | |
| September | 100.1 | 0.6 | % | -1.0 | % | March | |
The October Composite Leading Indicator is scheduled for release on November 17, 2017.