Economic sentiment buoyed by services sector

Cypriot economic sentiment improved in January spurred on by stronger business confidence in the services sector, according to the University of Cyprus index.

In January, economic sentiment in Cyprus advanced as the Economic Sentiment Indicator (ESICypERC) increased by 3.3 points to 111.7 from 108.4 in December 2019.

The increase resulted primarily from stronger business confidence in services and, to a smaller extent, from confidence improvements in industry, retail trade and among consumers.

An increase in the Services Confidence Indicator was driven by firms having more favourable views on their past performance (business situation and demand) and upward revisions in demand expectations.

The Retail Trade Confidence Indicator increased marginally as firms had less favourable views on their past performance were offset by upward revisions in sales expectations.

The Construction Confidence Indicator deteriorated due to companies having negative assessments of the current levels of their order books.

The Industry Confidence Indicator increased as a result of businesses being more positive on the current levels of their order books and stocks of finished products, which more than compensated for downward revisions in production expectations.

Consumer Confidence increased marginally mainly due to consumers’ stronger intentions to make major purchases in the next 12 months.