CYPRUS: Economic sentiment takes backseat as consumers lack confidence

Economic sentiment in Cyprus deteriorated slightly in February (112.3) as the University of Cyprus Economic Sentiment Indicator decreased by 0.1 points from January (112.4) and is 3.8 points worse off than a year ago.

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This decline was mainly driven by a loss of confidence in industry, among consumers and to a much lesser degree in retail.

UCY economists said business confidence in services strengthened, while confidence in construction remained unchanged.

The Services Confidence Indicator picked up as a result of improved assessments by firms of past business situations and their past demand.

The Retail Trade Confidence Indicator decreased slightly due to a deterioration in firms’ assessments of past sales and downward revision in sales growth.

The Construction Confidence Indicator remained unchanged as firms’ upward revisions in employment expectations were offset by more negative assessments of the current level of their order books.

Industry Confidence reversed as a result of a deterioration in how firms viewed their stocks of finished products, and downward revisions in production expectations.

A marginal increase in the Consumer Confidence Indicator was driven by less favourable responses regarding their past financial situation, their future financial conditions and the future economic conditions in Cyprus.

According to the Economics Research Centre, the Index averaged 115.4 points in 2018, compared to 114.8 in 2017.

The reason for this rise was the significant improvement of business trust in construction in comparison to 2017.