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Confidence in services helps boost sentiment

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Economic sentiment in Cyprus recovered to year-ago levels in January, mainly driven by confidence gains in services, having dropped in the previous month, according to a monthly survey compiled by the University of Cyprus.

The Economic Sentiment Indicator (ESI-CypERC) for January improved by 2.3 points compared with December 2023 to reach 105.4 points, marginally above the January 2023 ESI at 105.3.

Throughout the past year, economic sentiment fluctuated to a low of 103.1 in May and then again in December, having peaked at 108.3 in November.

The university’s Economics Research Centre said the Services Confidence Indicator picked up as firms’ views on their past and expected turnover improved.

The Retail Trade Confidence Indicator rose marginally as a result of upward revisions in sales expectations, despite a deterioration in firms’ assessment of stock levels.

Construction, industry down

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

The Industry Confidence Indicator also declined marginally because of a deterioration in firms’ assessments of the stocks of finished products.

The Consumer Confidence Indicator remained stable at the level registered in December.

On the one hand, consumers’ intentions to make major purchases strengthened in January. On the other hand, consumers’ views on their recent financial situation and consumers’ expectations about the economic conditions in Cyprus deteriorated in January.

In January, economic uncertainty in Cyprus decreased to 35.8 points owing to the lower uncertainty levels observed in services and industry. Uncertainty in construction and retail trade, and among consumers increased in January.