Economic sentiment improves in July, ERC says

Cyprus’ economic sentiment improved in July following two months of deterioration on the back of stronger business confidence in the sectors of services, construction and industry, the University of Cyprus Economic Research Centre (ERC) said on Tuesday.

According to the ERC, the Economic Sentiment Indicator (ESI) for July improved by 2.0 points reaching 111.1 units compared with 109.1 units in June.

The increase was driven by stronger business confidence in services, construction and industry, the ERC said.

On the volatility describing the ESI this year, the ERC notes that this is attributed to the large fluctuations in business confidence in the services sector.

According to the ERC, the business sentiment in services rose by 9 points in July. The Services Confidence Indicator increased as a result of firms’ more optimistic views on past business situation as well as past and expected demand, ERC added.

The Retail Trade Confidence Indicator decreased marginally as respondents’ views on current stock volumes and future sales deteriorated, while the Construction Confidence Indicator improved due to firms’ more favourable assessments of future employment plans, the ERC said.

In the industry sector, the Confidence Indicator increased due to a significant upward revision in production expectations.

The Consumer Confidence Indicator decreased as a result of consumers’ less favourable responses regarding their future financial conditions and the future economic conditions in Cyprus, including labour market conditions.

The Consumer Confidence Indicator was also adversely affected by the consumers’ downward revision of their savings expectations, the ERC added.

Source: Cyprus News Agency