Cyprus economic sentiment marginally up in June, after Covid19 crash

Economic sentiment in Cyprus improved in June, rising by 2.3 points from May to 75.2, following the post-COVID-19 fallout when from the February level of 111.0, the indicator crashed to 98.9 in March and 77.0 in April.

These were levels not seen since May 2013, when the Economic Sentiment Indicator (ESI-CypERC) compiled by the University of Cyprus disintegrated to below 70 points, soon after the economic meltdown and banking collapse.

The Economics Research Centre of the University of Cyprus said that 2.3point rise in the ESI-CypERC “was driven by confidence gains in all sectors, except construction, as well as by improvements in consumer confidence.”

The monthly report found that the Services Confidence Indicator rose marginally as the upward revisions in demand expectations were almost offset by the deterioration in firms’ assessments about their recent performance.

It said that the increase in the Retail Trade Confidence Indicator was due to firms’ more favourable assessments of their stock levels and upward revisions in sales expectations, while the Industry Confidence Indicator increased due to less adverse assessments of the current levels of order books and upward revisions in production expectations.

The Construction Confidence Indicator remained unchanged as more optimistic employment expectations were offset by worsening assessments of the levels of order books.

The university’s research centre said the rise in the Consumer Confidence Indicator reflected less pessimistic views on all three forward-looking components, i.e. household financial condition, economic conditions in Cyprus and expenditure on major purchases.

Business and consumer expectations also improved in June.

Nonetheless, uncertainty in all sectors and households increased vis-à-vis a similar period in 2019, the ERC report said. Uncertainty among firms in services and consumers rose further in June.

Although uncertainty among firms in retail trade, construction and industry declined in June, it remained well-above its 2019 levels.