CYPRUS: July economic sentiment retreats on general slowdown

The economic sentiment in July retreated in almost all sectors for the second consecutive month due to weaker business confidence in services, retail trade, construction and industry, according to the University of Cyprus benchmark index.

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The monthly Economic Sentiment Indicator (ESI-CypERC), calculated by the university’s Economics Research Centre decreased by 1.7 points to 107.8, compared with the previous month. The June Indicator dropped to the year-low of 109.5, with the highest point in the indicator recorded in the past 12 months seen in December 2018, when it peaked at 116.2.

The ERC said the monthly decline in the Services Confidence Indicator was driven by firms’ less favourable views on their past performance (business situation and demand) and downward revisions in demand expectations.

The decrease in the Retail Trade Confidence Indicator resulted from more negative assessments of past sales and downward revisions in sales expectations.

The small decline in the Construction Confidence Indicator was due to firms’ more negative views on the current level of their order books and downward revisions in employment expectations.

The decrease in the Industry Confidence Indicator resulted from more negative assessments of the current level of order books and downward revisions in production expectations.

The only reading that was in positive territory was the Consumer Confidence Indicator that increased marginally mainly due to more optimistic assessments of the future economic conditions in Cyprus and less pessimistic responses regarding consumers’ intentions to make major purchases in the near future.