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November economic sentiment improves

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The Economic Sentiment Indicator (ESI-CypERC) improved in November, compared to October, mainly due to strengthening business sentiment in the services and construction sectors, according to the University of Cyprus Economic Research Centre.

ESI-CypERC increased by 2.6 points from October, while Economic Uncertainty declined further in November, owing to lower uncertainty among service firms.

However, uncertainty among businesses in other sectors, particularly retail trade, increased. Uncertainty among consumers rose slightly.

A rise in the Services Confidence Indicator primarily resulted from significant improvements in firms’ assessments of their recent performance (business situation and turnover) and, to a smaller extent, from upward revisions in demand expectations rather than strengthening demand expectations.

An increase in the Construction Confidence Indicator resulted from improved assessments of the current levels of order books and upward revisions in employment expectations.

The Retail Trade Confidence Indicator remained unchanged at the level registered in October.

In November, the improvement in views on recent sales and stock levels was offset by the deterioration in sales expectations.

The Industry Confidence Indicator decreased as views on the current levels of order books and future production worsened.

In manufacturing, sentiment eased on the back of more negative assessments of current orders and more pessimistic estimates of future production.

Consumers in November appeared less pessimistic than in October about future labour market conditions, although a significant share still expects unemployment to rise.

Their assessments of price developments over the past 12 months reflected some easing of upward pressures for the second consecutive month.