Turnover according to VAT reports decreased in nearly half of all industries1 in May and June 2024 with year-over-year change less than inflation (6,0%) in most industries. Of the 12 largest industries turnover increased beyond inflation in only two: Real estate and technology. Growth was very small in other main industries with declines occurring in wholesale trade, metals manufacturing and vehicle sales. In total, real turnover growth was negative in most industries of the economy in May and Junes.
Turnover in real estate continued to grow or by 14%, totalling 28 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. Unlike previous periods the construction industry did not grow in tandem with the real estate industry, recording only 4% growth over all with turnover increasing by 5% in construction of buildings and 3% in specialised construction activities but declining by 8% in civil engineering.
Turnover in tourism was also small or approximately 189 billion ISK, growing by only 4% compared with the previous period in 2023. Significant growth was nonetheless in passenger air transport (14%) and travel agencies abroad (15%). However, turnover declined in other areas of the tourism industry, for example in passenger transport by land (-14%), accommodation (-5%), renting and leasing of motor vehicles (-3%) and domestic travel agencies (-1%). Turnover was unchanged in food and beverage service activities.
Turnover declined in the main export industries in May and June compared with the same period a year earlier. 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 or modestly higher in the period compared to last year. Turnover in fisheries declined by 2% but accounting for the 50% growth in the significantly smaller aquaculture sector turnover increased by 1% in total for the fishing, aquaculture and fish processing industry.
The technology sector grew by 8%, recording positive real growth like real estate. Despite decent overall growth it was quite dispersed among sub-sectors. Turnover increased most in high and medium-high technology manufacturing, or by 20%, which was mainly due to manufacturing of pharmaceuticals and medical equipment. However, 24% decline was in manufacture of computer, electronic and optical products. Modest growth was in computer related services (6%) with 12% growth in computer programming, consultancy and related activities being most noteworthy. Turnover was unchanged in computer programming activities but the industry recorded declines in the previous three periods. Lastly, information service activities (data processing, hosting, etc.) declined by 11%.
Sale of motor vehicles continued to decline or by 36% (29% when including repair of motor vehicles). Wholesale trade contracted by 2% due to a slowdown in the construction industry. Turnover in the retail trade increased modestly by 5% where supermarkets, grocery stores and pharmacies grew in tandem with inflation, or by 6-7%. However, clothing and footwear stores declined by 2% and hardware stores recorded no growth (equalling negative real growth of 6%).
About the data
Data for turnover according to VAT reports is preliminary. All numbers are in nominal terms unless otherwise specified. Inflation was 6.0% during the period of May-June 2023 to May-June 2024.
Revisions: At the time of our last press release for the period March-April 2024 VAT-turnover was estimated to have been 1,097.6 billion ISK (+1.46%). Following a review with more data available the turnover is estimated to have been 1,102.8 billion ISK (+1.94%).
This publication for May-June 2024 does not include numbers for agriculture during this period, specifically “Crop and animal production, hunting and related service activities” and “Forestry and logging” since data from farmers is generally reported biannually (and included in turnover for May-June and November-December) and filing deadlines happen later than in other industries. Consequently, data for the sum category “Total” is also not included for May-June 2024 until all numbers have been reported. However, data is published for “Total excluding agriculture and forestry”.
1 Many farmers report VAT biannually, in accordance with paragraph 31 of the VAT-laws and have longer reporting deadlines. Data on VAT-turnover in these activities during the first half of 2024 are not yet available.
Statistics
All economic activities
The tourism industry