Economic sentiment in Cyprus declined in October, with the Economic Sentiment Indicator (ESI) dropping by 2.4 points compared to the previous month, due to the deterioration of confidence in the services sector.
The ESI compiled by the University of Cyprus Economic Research Centre (ERC) declined to 112.6 units compared with 115 units in September.
“The decline was mainly driven by confidence losses in services, while economic confidence in industry, construction, retail trade and among consumers changed only marginally in October,” the UCY ERC said.
The Services Confidence Indicator declined due to a deterioration in companies’ assessments of past business situation as well as past and expected demand, whereas the retail trade Confidence Indicator increased as a result of improved assessments of past sales and upward revisions in sales expectations, the ERC said.
The Construction Confidence Indicator increased due to improved assessments of the levels of order books, the ERC added.
According to the ERC, the Industry Confidence Indicator fell as a result of a deterioration in firms’ assessments of the current level of order books and stocks of finished products.
The ERC noted that the marginal increase in the Consumer Confidence Indicator was driven by more optimistic responses regarding future economic conditions in Cyprus, including labour market conditions.
Consumers’ expectations about their own financial conditions and savings deteriorated.