Retail, construction boost econ sentiment in June

Economic sentiment in Cyprus improved for the third consecutive month, rising marginally in June, on improved business and consumer confidence, according to the benchmark index compiled by the Economics Research Centre of the University of Cyprus.

The June Economic Sentiment Indicator (ESI-CypERC) increased by 0.2 points to 100.8 points compared with 100.6 in May, driven by stronger business confidence in the retail trade and construction sectors, alongside further gains in consumer confidence.

This was an improvement from April’s 96.4 and 94.3 in March, the lowest in more than a year.

However, the ESI for June remained far below the monthly index throughout the past 12 months.

As regards the sub-categories, the Services Confidence Indicator declined, reflecting firms’ less favourable assessments of their recent performance (i.e. business situation and turnover) as well as lower turnover expectations.

The increase in the Retail Trade Confidence Indicator was driven by improvements in firms’ assessments across all three of its components, namely recent sales, expected sales and stock levels.

The Construction Confidence Indicator increased markedly because of further improvements in firms’ views on their order book levels and upward revisions in employment expectations.

The Industry Confidence Indicator remained unchanged from May. In June, the improvement in assessments of finished product stocks was offset by the deterioration in perceptions of current order books, while production expectations held steady.

The Consumer Confidence Indicator rose for the second consecutive month in June, as consumers’ expectations regarding both their financial situation and the country’s general economic conditions improved.

The Economic Uncertainty Indicator increased to 24.6 points in June, but stayed below the levels reached during March-April.

Economic uncertainty among consumers and firms in the services and construction sectors rose, although it remained relatively low, particularly among households and firms in the construction sector.