REYKJAVIK, Iceland, Nov. 17, 2016 (GLOBE NEWSWIRE) -- The Analytica Composite Leading Indicator (CLI) for Iceland rose in October for the third consecutive month. However, there were some revisions for previous months. The CLI still indicates growth above long term trend.
Four of the six components rise on the previous month, mainly tourist arrivals, the Gallup Index of Consumer Confidence and the value of fish catches. All components are adjusted for seasonality and long term trend. The largest impact is due to tourist arrivals and increased fish catches. However, after adjusting for seasonal effects Consumer Confidence has not been at higher levels since 2007. 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.
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 October four of the six underlying components are strengthening year on year. Also, four 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 October rises by 0.4 per cent to 102.2. This value serves as an indicator to economic activity six months into the future, i.e. April 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 | |||||||||
| October | 101.2 | 0.1 | % | 2.1 | % | April 2016 | |||
| November | 101.4 | 0.2 | % | 2.2 | % | May | |||
| December | 101.6 | 0.2 | % | 2.2 | % | June | |||
| 2016 | |||||||||
| January | 101.8 | 0.2 | % | 2.2 | % | July | |||
| February | 101.9 | 0.1 | % | 2.1 | % | August | |||
| March | 101.9 | -0.1 | % | 2.0 | % | Sept. | |||
| April | 101.7 | -0.2 | % | 1.9 | % | Oct. | |||
| May | 101.5 | -0.1 | % | 1.7 | % | Nov. | |||
| June | 101.4 | -0.1 | % | 1.4 | % | Dec. | |||
| July | 101.4 | 0.0 | % | 1.0 | % | Jan. 2017 | |||
| August | 101.5 | 0.1 | % | 0.7 | % | Feb. | |||
| September | 101.8 | 0.3 | % | 0.8 | % | March | |||
| October | 102.2 | 0.4 | % | 1.0 | % | April | |||
The November Composite Leading Indicator is scheduled for release on December 16, 2016.
Further information is provided by Analytica’s CEO, Mr. Yngvi Hardarson Tel. +354 5278890 - email: yngvi@analytica.is
