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Services, construction drag December sentiment

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The economic sentiment indicator (ESI-CypERC) dropped in the last month of the year, driven by weaker business confidence in services and construction, a reversal of the November index and for the same reasons.

The University of Cyprus Economics Research Centre said the monthly economic sentiment in Cyprus deteriorated by 4.6 points compared to the previous month, due to weaker business confidence primarily in services and, to a lesser degree, in construction.

Despite four months of improvement, the benchmark ESI dropped to 104.0 points, below the July level of 104.7, the same level as in December 2022.

At the same time, the Economic Uncertainty Indicator rose by 15.5 points to 39.2, just above the December 2022 level of 38.8 points, mainly because of higher uncertainty among firms in services.

The ERC said the decline in the Services Confidence Indicator resulted from less favourable views by businesses on their past performance (business situation and turnover), and downward revisions in demand expectations.

Retail trade unchanged

The Retail Trade Confidence Indicator remained unchanged in December for the second month in a row, as the components of the indicator stayed broadly stable vis-à-vis November.

The Construction Confidence Indicator decreased, as firms assessed their current levels of order books more negatively and adjusted their employment expectations downwards.

The Industry Confidence Indicator rose marginally due to firms’ improved views on their current levels of order books and stocks of finished products.

In December, the Consumer Confidence Indicator rose for the second month in a row.

Compared to November, consumers assessed their current and future financial situation more favourably; moreover, consumers expressed more optimistic views on the future economic conditions in Cyprus.