Economic sentiment improves on consumer confidence

Economic sentiment in Cyprus improved in December, as the University of Cyprus Economic Sentiment Indicator (ESI-CypERC) increased by 1.0 point compared to November.

The increase in the ESI-CypERC to 108.8 points, the second highest in the year, was driven by stronger consumer confidence and, to a lesser extent, by higher business confidence in industry, the UCy Economics Research Centre said.

The ESI dipped to 107.8 points in November, having peaked at 109.1 in October.

The Services Confidence Indicator remained unchanged, as lower demand (i.e. turnover) expectations were offset by improved assessments of the past business situation.

The Retail Trade Confidence Indicator remained stable, as the deterioration in views on recent sales and stock levels was counterbalanced by the improvement in sales expectations.

The Construction Confidence Indicator declined slightly for the second month in a row in December because of downward revisions in employment expectations.

The increase in the Industry Confidence Indicator mainly resulted from improvements in firms’ assessments of the current level of order books and upward revisions in production expectations.

The Consumer Confidence Indicator rose for the second consecutive month in December. The marked increase was driven by consumers’ improved views on their recent and future financial situation, as well as by upward revisions in consumers’ expectations about the economic conditions in Cyprus.

The Economic Uncertainty Indicator increased in December, owing to higher uncertainty among firms in services and retail trade. Despite the December increase, uncertainty in services has remained relatively low.

Uncertainty among construction firms and among consumers declined markedly in December, having survived a month-long strike in the concrete production and supply sector.