Economic sentiment deteriorated slightly in September

In September 2020, economic sentiment in Cyprus deteriorated slightly as the Economic Sentiment Indicator (ESI-CypERC) decreased by 1.0 point compared with August 2020.

According to the Economics Research Centre of the University of Cyprus (CypERC), the decrease in the ESI-CypERC was driven by weaker business confidence in services, construction and industry.

The marginal decrease in the Services Confidence Indicator resulted from downward revisions in demand expectations, despite improvements in firms’ assessments of the past performance.

CypERC points out that the Retail Trade Confidence Indicator remained unchanged compared to August; firms’ assessments of past sales and current stock levels as well as sales expectations stayed broadly stable.

Moreover, the decline in the Construction Confidence Indicator was driven by a deterioration in firms’ assessments of the levels of order books and downward revisions in employment expectations.

According to the findings by CypERC, the Industry Confidence Indicator decreased due downward revisions in production expectations and the Consumer Confidence Indicator improved slightly.

In September, consumers assessed their recent financial conditions less adversely and revised their expectations about their future financial conditions and the future economic conditions in Cyprus upwards. Nevertheless, CypERC says, consumers’ expectations about the future economic conditions in the country remain particularly pessimistic.