Economic climate declines due to weaker expectations

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Economic sentiment in Cyprus declined to its lowest level in 2019 during December due to weaker business confidence in services and industry.

The Economic Sentiment Indicator compiled by the University of Cyprus’ Economics Research Centre (ERC) dropped by 1.8 points to 109.2 points in December compared with 111.0 points the previous month.

“The decrease resulted from weaker business confidence among firms in services and industry,” the ERC said.

There was also a marked 6% annual drop as the indicator was down 7 points from the December 2018 benchmark of 116.2 while December 2019 recorded the lowest figure of the year.

The deterioration in December’s 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 marginal increase in the Retail Trade Confidence Indicator was driven by improved assessments of past sales and upward revisions in sales expectations.

Meanwhile, the Construction Confidence Indicator improved due to companies having a more favourable view on the current levels of their order books.

The Industry Confidence Indicator decreased as a result of more negative assessments of the current levels of order books.

However, the Consumer Confidence Indicator remained unchanged as upward revisions in consumer expectations regarding their financial conditions and the economy were offset by weaker intentions to make major purchases.