Cyprus economic sentiment indicator improves for seventh month

The Economic Sentiment Indicator for November 2013 registered an increase of 3.5 units compared with October owing to mainly an upbeat in the services sector and to the consumer’s improved expectations.

This is the seven consecutive increase of the ESI, according to the University of Cyprus Economic Research Centre, which compiles the index.

"The improvement of the ESI in the services sector comes from the fewer negative evaluations on the economic situation and demand in the last few months and the clearly improved expectations on turnover in the next quarter," the ERC said.

Furthermore, the improvement of the indicator among the consumers comes from the fewer negative evaluations on the economic situation of households and of Cyprus in general in the next year.

The improvement brings the index at the levels of 2011, before the outbreak of a banking crisis that culminated in the agreement, last March, between Cyprus and its international lenders (the European Commission, the European Central Bank and the IMF) on a €10 billion bailout that featured a bail in of uninsured deposits, which shattered the island`s financial system.

However, business climate in manufacturing continues to decline due to the accumulated inventories, whereas the ESI in retail trade deteriorated marginally due to the evaluations on sales in the next months. The indicator in constructions deteriorated significantly given the businesses` evaluations on the projects in progress and employment were more negative than the previous two months.