CYPRUS: Economic sentiment declines for third consecutive month

Economic Sentiment declined in March for the third month in a row mainly due to a deterioration in business confidence in the services sector, the University of Cyprus Economic Research Centre (ERC) said.

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The Economic Sentiment Indicator (ESI) declined by 2.0 points to 110.3 points in March compared to 112.3 the previous month. At the same time last year, the index was at a higher 114.2 points

“The decrease was mainly driven by a decline in business confidence in the services sector,” the ERC said.

According to the ERC, the decline in the Services Confidence Indicator was driven by companies having a less favourable view on their past performance (business situation and demand), and downward revisions in demand expectations.

Furthermore, the marginal increase in the Retail Trade Confidence Indicator was due to upward revisions in sales expectations.

The Construction Confidence Indicator increased as a result of firms’ improved assessments of the current level of their order books.

Economists said the more favourable assessments on stock of finished products resulted in an increase to the Industry Confidence Indicator.

The Consumer Confidence Indicator declined marginally as consumers believe that future economic conditions in Cyprus will deteriorate which affected their intentions to make major purchases.