Turnover according to VAT reports increased modestly in most industries in March and April 2024 compared with the same months in 2023 and beyond inflation (6.4%) in only half of all industries. In only four of the country’s 14 main industries did turnover growth exceed inflation: real estate, construction, information technology and communications, and to a very small extent tourism. Little growth and declines were prominent in most other industries with especially sharp declines in fisheries, manufacturing of metals and vehicle sales.
Turnover in real estate continued to grow and this time by 17%, totalling 26 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 14% with the increase in turnover evenly spread across its subsectors.
Turnover in tourism grew by 7% to 129 billion ISK compared with the same period in 2023. Despite the moderate growth it barely exceeded inflation with most of the gains occurring in three sectors: renting and leasing of motor vehicles (15%), passenger air transport (13%) and travel agencies (8%) where turnover in domestic travel services declined by 3%. Other areas of the tourism industry experienced minimal growth or declines, for example accommodation and food service activities (4%), passenger transport by land or sea (-12%) and physical well-being activities (geothermal baths, etc.) (-18%). Overall, growth in the domestic side of the tourism industry diminished in March and April.
Turnover in the main export industries declined significantly in March and April compared with the same period a year earlier. A significant slowdown occurred in fishing, aquaculture and fish processing which contracted by nearly 20% due to no capelin catch in the first quarter of 2024 which furthermore was the main reason for a sharp declined in GDP in the first half of 2024. Turnover in metals manufacturing continued to decline and this time by 11%. Unlike previous periods the decline was to a greater extent caused by lower quantity sold than the global price of aluminium and the Icelandic Krona, both of which stayed relatively unchanged in the period compared to last year.
Results for the technology sector were mixed. In total, the technology sector grew by 5%. High technology, information technology and communications and computer related services all grew by approximately 9%. However, this was weighed down by a 6% decrease in turnover in high and medium-high technology manufacturing. Noteworthy was an 11% decline in computer programming activities. This was the third period of declines in a row but significant growth had previously occurred in 2022 and throughout the first half of 2023.
Sale of motor vehicles declined significantly or by 33% (25% 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 with growth markedly below inflation. Wholesale trade increased by only 3% where fuel turnover was nearly unchanged. Supermarkets and pharmacies grew by 8% and 10%, respectively, outpacing hardware stores and clothing and footwear stores whose turnover fell by 6% and 2%, respectively.
About the data
Data for turnover according to VAT reports is preliminary. All numbers are in nominal terms unless otherwise specified. Inflation was 6.4% during the period of March-April 2023 to March-April 2024.
Revisions: At the time of our last press release for the period January-February 2024 VAT-turnover was estimated to have been 996.8 billion ISK (+4.3%). Following a review with more data available the turnover is estimated to have been 998.8 billion ISK (+4.5%).
Statistics
All economic activities
The tourism industry