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Services boost May economic sentiment

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Economic sentiment in Cyprus improved in May, as the benchmark Economic Sentiment Indicator (ESI-CypERC) increased by 1.6 points from April to 104.5, up 1.4 points from May last year.

The University of Cyprus Economics Research Centre, that compiles the monthly survey, said the ESI-CypERC increase was mainly driven by stronger business confidence in services, despite a drop in retail trade and construction.

The increase in the Services Confidence Indicator was due to firms’ improved views on their past business situation and their recent turnover.

The small drop in the Retail Trade Confidence Indicator resulted from worsening assessments of past sales and downward revisions in sales expectations.

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

The Industry Confidence Indicator remained unchanged in May, as the improvement in production expectations was offset by a deterioration in the assessments of the current level of order books and in the views on stocks of finished products.

The Consumer Confidence Indicator rose marginally in May.

Consumers’ expectations about their financial situation and the general economic conditions in Cyprus improved; however, consumers’ intentions to make major purchases over the next months weakened in May.

On the other hand, economic uncertainty in Cyprus decreased in May, owing to the lower uncertainty levels among consumers and among firms in all sectors, except construction.