Turnover according to VAT reports increased modestly in most industries in January and February 2024 compared with the same months in 2023 and beyond inflation (6.6%) in only half of all industries. The greatest increase was in real estate, construction and food manufacturing. However, turnover decreased the most in manufacture of basic metals, sale of motor vehicles and fisheries. The tourism industry returned to growth after unusually subdued activity in late 2023.

Turnover in real estate continued to grow and this time by 17%, totalling 23.5 billion ISK. Most of the increase was due to higher rent revenue from commercial real estate but turnover in real estate brokerage also grew significantly. The construction industry also experienced similar growth or 16%, mostly due to 15% increased turnover in construction of buildings and 18% in specialised construction activities. The significantly smaller sub-industry of civil engineering also grew by 23%.

Turnover in the tourism industry was 110 billion ISK which was a 10% increase from the previous year. Renting and leasing of motor vehicles increased most or by 19% while travel agencies ranked second with 14% growth. Passenger air transport grew by 8% and accommodation and food service activities by 6%. As a result of this growth the tourism industry again became the second largest industry in the country (in terms of turnover) having dropped one place in the last stages of 2023 due to slower growth during a time of volcanic activity in the Reykjanes peninsula.

The manufacturing side of the economy had mixed results as relatively lower aluminium price and stronger currency caused turnover to drop in metals manufacturing for the eighth time in a row and this time by 15%. Contrary to that decrease, food manufacturing experienced 15% growth as production of dairy products, oils and chocolate confectionary increased, but the world price of cocoa has increased sharply during 2024 with the price doubling in January-February from the same time in 2023. Turnover in meat processing increased by 8%.

Within the technology sector the results were also somewhat mixed. In total, the sector grew by 5% but the 8% increase in high technology services was dragged down by a 1% decrease in high and medium-high technology manufacturing. Turnover also grew by 10% in information and communications technology. Lastly, turnover in fishing, aquaculture and fish processing contracted by 5%.

Sale of motor vehicles declined for the first time since 2020 or by 17% (9% when including repair of motor vehicles), but starting from 2024 electric vehicles were no longer tax exempt, causing prices to rise and quantity demanded to drop. Turnover in other retail industries changed to a much lesser degree. Wholesale trade increased in tandem with inflation while retail trade grew moderately beyond that, or by 9%. Turnover in supermarkets and convenience stores and pharmacies increased by 10% and 13%, respectively, but in clothing and footwear stores there was only 6% growth and even smaller 4% growth in hardware stores.

About the data
Data for turnover according to VAT reports is preliminary. All numbers are in nominal terms unless otherwise specified. Inflation was 6.6% during the period of January-February 2023 to January-February 2024. Revisions: At the time of our last press release for the period November-December 2023 VAT-turnover was estimated to have been 1,177.2 billion ISK (-0.1%). Following a review with more data available the turnover is estimated to have been 1,190.6 billion ISK (+1.0%).

All economic activities
The tourism industry

Further Information

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