Economic sentiment down, says UCy survey

Economic sentiment dropped by 1.5 points in September, despite a steady recovery since April, due to weakened business confidence in services and, to a smaller extent, from a fall in construction confidence, a monthly survey by the University of Cyprus has shown.

The Economic Sentiment Indicator (ESI-CypERC) for September decreased by 1.5 points to 107.1 compared with 108.6 in August and the year-high of 110.3 recorded in the June survey.

According to Financial Mirror data, this is close to the favourable indicators in the third and fourth quarters of 2019, prior to the Covid-19 pandemic and after three years of back-to-back record tourist arrivals and a boom in construction, mostly linked to the golden passports’ scheme.

The pre-Covid economic sentiment in January 2020, recorded 111.7 from 108.4 in December 2019, due mainly to stronger business confidence in services and, to a lesser extent, from confidence improvements in industry, retail trade and among consumers.

For the September 2021 monthly indicator, the UCy survey said he decrease in Services Confidence resulted from firms’ less favourable views of their past business situation and past demand, despite improved demand expectations.

The Retail Trade Confidence Indicator increased marginally because of more favourable assessments of past sales, despite downward revisions in sales expectations.

The Construction Confidence Indicator deteriorated slightly as a result of downward revisions in employment expectations, despite more favourable assessments of the current levels of order books.

The marginal increase in the Industry Confidence Indicator was driven by the improvement in firms’ views on the current levels of order books.

The UCy survey concluded that the Consumer Confidence Indicator rose in September, registering improvements for the second month in a row. Consumers revised their expectations about the future economic conditions in Cyprus upwards; also, consumers expressed stronger intentions for making major purchases.