Blönduós stands on both sides of the Blanda river. Its main economic activity is various services for the local area, in addition to fishing and light industry. Services for travellers have been growing in recent years. Upstream from the bridge is Hrútey island, a park that was protected in 1975. Traditional knit and wool-making products are displayed at The Handicraft Museum; a section is named after Halldóra Bjarnadóttir (1873-1981), Iceland's oldest-ever woman. The museum displays a collection of home-made woollens and textile objects, beautiful national costumes, and the ancient instruments used to make them. A sea ice centre is located in Hillebrandtshús in the oldest part of town, providing information about sea ice from various different perspectives.

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