Εconomic sentiment in Cyprus improved in August 2020, as the Economic Sentiment Indicator (ESI-CypERC) increased by 1.9 points compared with July 2020. However, consumer confidence weakened considerably.
According to a press release of the Economics research centre of the University of Cyprus, the increase in the ESI-CypERC was driven by confidence improvements among firms in all sectors surveyed.
The increase in the Services Confidence Indicator resulted from firms’ less adverse assessments of their past performance and upward revisions in demand expectations.
The increase in the Retail Trade Confidence Indicator was due to improved views on the current stock levels and upward revisions in sales expectations.
The Construction Confidence Indicator rose as firms’ assessments of the levels of order books improved, despite the deterioration in employment expectations.
The Industry Confidence Indicator increased due to improved assessments of the current levels of stocks of finished products and upward revisions in production expectations.
The Consumer Confidence Indicator declined as all of its components deteriorated. In August, consumers assessed their recent financial conditions more negatively, and revised their expectations about their future financial conditions and the future economic conditions in Cyprus downwards.
Moreover, in August consumers’ intentions to make major purchases weakened.
Additionally, in August, uncertainty in construction and industry declined, whereas uncertainty in services and retail trade increased. Uncertainty among consumers remained unchanged.
Despite the monthly fluctuations, uncertainty in all sectors and among consumers remains elevated compared to a similar period in 2019.