Analytica

Iceland Leading Indicator - Leading indicator unchanged for third consecutive month

REYKJAVIK, Iceland, May 17, 2018 (GLOBE NEWSWIRE) -- The Iceland Composite Leading Indicator (CLI) remained unchanged in April for the third consecutive month. There are indications that recent CLI developments represent the renewal of faster growth early this year. However, uncertainty is greater when looking towards year-end.

Three of the six components rise on the previous month. These are the MSCI World Index, fish catches and merchandise imports. 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.

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 the month of April, 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 April is unchanged at 101.7. This value serves as an indicator to economic activity six months into the future, i.e. October 2018. A value of 100 indicates GDP in line with its long-term trend.

Table 1. Analytica's CLI 2017-2018
		Change in %					Indication
	Index	on month		YOY			for month
2017
April	99.4	-0.2	%	-1.4	%		Oct. 2017
May	99.1	-0.3	%	-1.7	%		Nov.
June	98.8	-0.3	%	-1.9	%		Dec.
July	98.8	0.0	%	-2.0	%		Jan. 2018
August	99.3	0.5	%	-1.5	%		Feb.
September	100.1	0.8	%	-0.7	%		March
October	100.8	0.7	%	0.3	%		April
November	101.3	0.5	%	1.1	%		May
December	101.6	0.3	%	1.8	%		June
2018
January	101.7	0.1	%	2.1	%		July
February	101.7	0.0	%	2.1	%		August
March	101.7	0.0	%	2.1	%		Sept.
April	101.7	0.0	%	2.3	%		Oct.

The May Composite Leading Indicator is scheduled for release on June 19, 2018.