Turnover in September-October 2023, according to the latest VAT-reports, increased in most industries compared with the same period in 2022 although for some the increase did not exceed the period’s inflation of 7.9%. Turnover increased most in real estate, information and communications technology and motor vehicle trade. On the other hand, turnover decreased in manufacture of basic metals and high and medium-high technology manufacturing.
Turnover in real estate activities was 29 billion ISK and increased by 37% or 8 billion ISK during the period compared with the same time in 2022. Most of the increase was due to higher rent revenue from commercial real estate. Significant growth in that area of the industry in recent years due to general growth, tourism and other activities contributed to this period’s turnover being the highest on record for real estate activities. In addition, the construction industry experienced an overall 15% increase in turnover with the growth being relatively evenly distributed among its sub-categories: Construction of buildings (13%), civil engineering (16%) and specialised construction activities (17%).
The tourism industry continued to grow with turnover increasing by 17% in September-October 2023 or from 145 billion ISK to 169 billion ISK. Most notable was a 39% increase in accommodation but other tourism industries also experienced growth, e.g. food and beverage service activities, passenger air transport and travel agencies which all grew by approximately 11%. Renting and leasing of motor vehicles grew to a lesser extent or by 3%.
The manufacturing side of the economy had mixed results. Turnover in metals manufacturing continued to decline as the world market price of aluminium stayed low. Overall, the industry’s turnover was 57 billion ISK or 17% lower than the 69 billion ISK recorded a year earlier. This was the sixth drop in a row. In technology there was a very modest drop of about 1% overall for high and medium high technology manufacturing and knowledge intensive high technology services. However, the results were very divergent within the sector where a 24% fall in turnover in high and medium high technology manufacturing contrasted sharply with a 23% increase in information and communications technology and 12% increase in other high technology services (primarily computer related services which grew by 36%). Manufacturing of food products increased by 11% with turnover in meat processing rising by 13%.
Lastly, turnover increased by 21% in sale of motor vehicles. Significant growth has been in the industry since 2020 when electric vehicles became exempt form value added tax but that exemption will expire come 2024. Other trade industries experienced modest growth, although turnover increased by 13% for supermarkets and convenience stores and 11% for drug stores. Same applied to the fishing industry which grew by 10% with turnover in aquaculture rising sharply by 39%.
About the data
Data for turnover according to VAT reports is preliminary. All numbers are in nominal terms unless otherwise specified. Inflation was 7.9% during the period of September-October 2022 to September-October 2023.
Revisions: At the time of our last press release for the period July-August 2023, VAT-turnover was estimated to have been 1,187.3 billion ISK (+4.9%). Following a review with more data available the turnover is estimated to have been 1,189.8 billion ISK (+5.1%).
Furthermore, turnover for the year 2022 was estimated to have been 6,398.7 billion ISK but following revisions (corrections in VAT reports in accordance with 2022 tax returns) it is estimated to have be 6,421 billion ISK.
Statistics
The tourism industry
All economic activities