Iceland Leading Indicator – Fishermen strike imp

REYKJAVIK, Iceland, Feb. 17, 2017 (GLOBE NEWSWIRE) -- The Analytica Composite Leading Indicator (CLI) for Iceland dropped by 0.1 per cent in January. Also, there were some downward revisions for the last three months. However, the CLI still indicates growth above long term trend.

Three of the six components fall on the previous month with the largest impact being due to the contraction of the value of fish catches. This is due to a fishermen strike which has been ongoing since mid December. All components are adjusted for seasonality and long term trend. Despite the current drop the long term trend of some important CLI components is still strong including tourist arrivals. 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 January three of the six underlying components are strengthening 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 January falls by 0.1 per cent to 100.9. This value serves as an indicator to economic activity six months into the future, i.e. July 2017. A value of 100 indicates GDP in line with its long term trend.

The February Composite Leading Indicator is scheduled for release on March 17, 2017.

Further information is provided by Analytica’s CEO, Mr. Yngvi Hardarson Tel. +354 5278890 - email: yngvi@analytica.is