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Economic climate improves further in May, says ERC

27 May, 2014

The economic climate improved in May, as expectations in services and among consumers improved, while retail trade and constructions still suffered.

The Economic Sentiment Indicator increased by 2.3 points, compared to the previous month, the Economics Research Centre of the University of Cyprus noted in its business and consumers surveys.
ERC said the increase is mainly a result of improvement in the economic climate in services and among consumers, as well as a marginal improvement in manufacturing.

In particular, the improvement of climate in the services sector derives from positive reviews of the economic situation of the companies in the last quarter and more optimistic estimates for demand in the next quarter.
Also consumers appear less pessimistic regarding the economic situation of the households and of Cyprus, this year and the next one as well.

On the contrary, May saw a worsening of the climate in retail trade due to negative assessments of the current situation and for the next quarter.
The deteriorating climate in constructions is related to the companies` negative reviews of the current situation, rather than on their expectations.

The economic climate in services seems to recover faster than in other sectors which, according to the ERC, may be indicating which economic activities will lead the Cypriot economy out of recession.
The Centre noted that, following a sharp drop in April 2013, ESI constantly rises gradually returning to its historical average, reaching levels similar to 2010.