30/12/2010 14:49
The economic environment in Cyprus deteriorated in December 2010, denying expectations for a gradual improvement of the psychology. In the most critical month of retail trade, the consumers’ psychology hot a record low last seen in March, confirming forecasts for stagnation during the Christmas holidays. The other sectors of the economy worsened too, raising concerns for the maintenance of the economic recovery in the past few months.
According to latest survey of the Economic Research Unit of the University of Cyprus released on Thursday, the economic conjuncture index fell by 8.8 points in December to 77.3 points from 86.1 points in November.
According to the Unit, the recovery of the economic climate in Cyprus is small to marginal.
In general, the business climate is much more changeable in Cyprus than the other EU member states, where its shows a slight recovery.
Services
In the sector of services, the business climate worsened marginally compared to November due to the deterioration in expectations. Compared to November, fewer businesses expect an increase in the demand and the sale prices in the next three months. The businesses’ estimate on their economic condition, the demand for the services in the past three months and the anticipated employment in the next three months remained the same. On the other hand, more businesses evaluated positively the employment in the past three months.
The difference between the percentage of positive and negative responds in the sector of services deteriorated to 4 from 7 in November.
Constructions
The climate in constructions has deteriorated too, due to the deterioration of the current condition and the expectations.
Most construction businesses in December evaluate negatively their activities in the past three months and most evaluate negatively the prospects for employment in their sector in the next three months.
The perception of the businesses for the current overall order books remains at the same negative level. The difference between the percentage of the positive and negative responds stood at -44 from -41 in November.
Manufacture
In manufacture, the business climate worsened due to the deterioration of the current condition. The difference between the percentage of the positive and the negative responds stood at -6 from 1.
Trade
The retail trade deteriorated as well, due to the worsening of the current condition and the expectations. Most businesses observed a drop in sales in the past three months and most declared that they expect a decline in their sales in the next few months.
Also, most businesses expect a decrease in the orders to the suppliers and the employment in the next few months. At the same time, however, fewer businesses observed an increase in their stock and more anticipate an increase in the sale prices in the next three months.
The difference between the percentage of the positive and negative responds stood at -22 from -15 in November.
Consumers
The consumers affected negatively the island’s economic climate.
Compared to November, their forecasts for the economic condition of their households in the past 12 months as well as their expectations for the next 12 months have deteriorated significantly. The consumers appear more pessimistic for the general economic condition in Cyprus too.
Most consumers believe that unemployment in Cyprus in the next 12 months will show an increase. Finally, compared to November, most consumers believe that this is not a good period of time either for big purchases or for saving. The difference between the percentage of the positive and negative answers stood at -40 from -31 in November.
According to latest survey of the Economic Research Unit of the University of Cyprus released on Thursday, the economic conjuncture index fell by 8.8 points in December to 77.3 points from 86.1 points in November.
According to the Unit, the recovery of the economic climate in Cyprus is small to marginal.
In general, the business climate is much more changeable in Cyprus than the other EU member states, where its shows a slight recovery.
Services
In the sector of services, the business climate worsened marginally compared to November due to the deterioration in expectations. Compared to November, fewer businesses expect an increase in the demand and the sale prices in the next three months. The businesses’ estimate on their economic condition, the demand for the services in the past three months and the anticipated employment in the next three months remained the same. On the other hand, more businesses evaluated positively the employment in the past three months. The difference between the percentage of positive and negative responds in the sector of services deteriorated to 4 from 7 in November.
Constructions
The climate in constructions has deteriorated too, due to the deterioration of the current condition and the expectations.
Most construction businesses in December evaluate negatively their activities in the past three months and most evaluate negatively the prospects for employment in their sector in the next three months.
The perception of the businesses for the current overall order books remains at the same negative level. The difference between the percentage of the positive and negative responds stood at -44 from -41 in November.
Manufacture
In manufacture, the business climate worsened due to the deterioration of the current condition. The difference between the percentage of the positive and the negative responds stood at -6 from 1.
Trade
The retail trade deteriorated as well, due to the worsening of the current condition and the expectations. Most businesses observed a drop in sales in the past three months and most declared that they expect a decline in their sales in the next few months.
Also, most businesses expect a decrease in the orders to the suppliers and the employment in the next few months. At the same time, however, fewer businesses observed an increase in their stock and more anticipate an increase in the sale prices in the next three months.
The difference between the percentage of the positive and negative responds stood at -22 from -15 in November.
Consumers
The consumers affected negatively the island’s economic climate.
Compared to November, their forecasts for the economic condition of their households in the past 12 months as well as their expectations for the next 12 months have deteriorated significantly. The consumers appear more pessimistic for the general economic condition in Cyprus too.
Most consumers believe that unemployment in Cyprus in the next 12 months will show an increase. Finally, compared to November, most consumers believe that this is not a good period of time either for big purchases or for saving. The difference between the percentage of the positive and negative answers stood at -40 from -31 in November.
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