Business confidence improves

Cyprus business seems to have discounted a doom-and-gloom fallout from the war in Ukraine, with economic sentiment for April improving by 2.8 points but still below the level before Russia’s invasion.

The University of Cyprus Economics Research Centre said its April Economic Sentiment Indicator (ESI-CypERC) increased by 2.8 points to 104.9 from 102.1 in March, on the back of stronger business confidence in services, retail, and industry, marginally above the year-ago level of 103.9 in May 2021.

However, the figure is still below the 111.5 points in the February ESI, expecting an economic improvement for 2022, as Cyprus gradually abandoned Covid-related restrictions on better epidemiological data.

The Services Confidence Indicator for April increased due to improved assessments of past performance (business situation and demand) and upward revisions in demand expectations, the UCy survey said.

It said the increase in the Retail Trade Confidence Indicator was driven by upward revisions in sales expectations, despite more pessimistic assessments of the current stock levels.

The decline in the Construction Confidence Indicator resulted from less favourable assessments of the levels of order books and downward revisions in employment expectations.

The Industry Confidence Indicator increased due to more favourable views on the current levels of order books and stocks of finished products and more optimistic views on future production.

The Consumer Confidence Indicator remained unchanged from the March ESI.

The deterioration in the assessments of household financial conditions was offset by the upward revision in expectations about the general economic conditions in the country.

In April, economic uncertainty decreased in services, construction, industry and among consumers; uncertainty among firms in the retail trade sector increased further.

Firms’ selling price expectations rose again, indicating a continuation of upward price pressures.