Business sentiment improves, consumer confidence low

While business sentiment in Cyprus improved during August, increasing by 1.9 points from July, consumer confidence weakened considerably, according to the University of Cyprus Economic Sentiment Indicator.

The indicator reached 81.6 points in August from 79.7 in July but it is way off last year’s level of 110.7 after the fallout from COVID-19 lockdown and other restrictions.

UCY’s economics research centre said the indicator was driven by confidence improvements among firms in all sectors of the economy.

An increase in the Services Confidence Indicator resulted from firms’ less adverse assessments of their past performance and upward revisions in demand expectations.

The Retail Trade Confidence Indicator was up due to improved views on the current stock levels and upward revisions in sales expectations.

The Construction Confidence Indicator rose as firms’ assessments of the levels of order books improved, despite the deterioration in employment expectations.

The Industry Confidence Indicator increased due to improved assessments of the current levels of stocks of finished products and upward revisions in production expectations.

The Consumer Confidence Indicator declined as all of its components deteriorated.

In August, consumers assessed their recent financial conditions more negatively and revised downward their expectations about their future financial and economic conditions in Cyprus.

Moreover, in August consumers’ intentions to make major purchases weakened.

Additionally, uncertainty in the construction industry declined, whereas uncertainty in services and retail trade increased.

Uncertainty among consumers remained unchanged.

Despite the monthly fluctuations, uncertainty in all sectors and among consumers remains elevated compared to a similar period in 2019.