Cyprus’ economic climate deteriorated in August, with the Economic Sentiment Indicator (ESI) compiled by the University of Cyprus Economics Research Centre (CypERC) falling by 1.8 points compared with July. The decline, which brought the index to its lowest level in 16 months, was mainly driven by weaker confidence in the services and construction sectors.
According to the CypERC, businesses in services reported a broad deterioration across all components, including assessments of their recent financial situation, turnover in the last quarter, and expectations for the coming months. The construction sector also saw sentiment weaken due to less favourable evaluations of ongoing projects, reversing the momentum recorded in July.
By contrast, confidence in retail trade improved significantly, supported by lower stock levels and more optimistic sales expectations for the next quarter, which reached their highest level in six years. Manufacturing sentiment also edged up, largely on the back of upward revisions to production expectations.
Consumer confidence strengthened notably, reaching its highest point in nearly four years. Households gave more positive assessments of both their current financial situation and their outlook for the future. Optimism also extended to the broader national economy, while intentions for major purchases and savings rose.
Meanwhile, the Economic Uncertainty Index declined for the second consecutive month, reflecting reduced uncertainty among both businesses—particularly in services—and consumers.
