Economic sentiment drops in October

With COVID-19 transmission on an upward curve, economic sentiment deteriorated in October as business confidence weakened, a monthly indicator by University of Cyprus (UCY) economists shows.

In October, economic sentiment in Cyprus worsened as the UCY Economic Sentiment Indicator fell by 1.6 points compared with September.

The decrease resulted from “weaker business confidence in services, retail trade and, to a smaller degree, in industry“.

Cyprus is experiencing its worst rate of COVID cases – regularly hitting three-digits – since the outbreak in March.

The drop in the Services Confidence Indicator resulted from the deterioration of company projections on their past business situation and downward revisions in demand expectations.

The Retail Trade Confidence Indicator declined “due to firms becoming more pessimistic about their sales over the next three months.”

On the other hand, an increase in the Construction Confidence Indicator was driven “by an improvement in firms’ assessments of the levels of order books and upward revisions in employment expectations”.

The Industry Confidence Indicator decreased marginally due to downward revisions in production expectations, despite improved assessments of the current level of stocks of finished products, the ERC said.

Meanwhile, the Consumer Confidence Indicator was unchanged as the upward revisions in expectations about their financial conditions were offset by the downward revisions in their expectations about the general economic conditions in the country.