Barometer: Limassol companies less optimistic, and a lot more reserved, than six months ago

Limassol companies are now less optimistic, and a lot more reserved, than they were six months ago, following four years of “imported” crises – though things are looking up compared with autumn last year, according to the Limassol Chamber Business Barometer for Autumn 2023.

The key challenges facing Limassol businesses to emerge from the barometer are the ECB’s rising interest rates, shortage of staff and lack of ability to find skilled staff, and a stated lack of sufficient support from the government.

“Despite predictable (and even not-so-predictable) inter-sectoral variations, one overriding conclusion is that beyond doubt, Limassol companies are now less optimistic, and a lot more reserved, than they were six months ago,” the barometer said. “This is evident in the reduced numbers of those who will hire employees or proceed with new investments. It is also evident in their sales projections which are definitely not as good as six months before.”

Regarding the challenges, it added: “Considering the problems facing Limassol entrepreneurship, with the exception of interest rates, which shot up of late in the wake of ECB decisions, there are still across-the-board labour shortages, in addition to discomfort over high costs and what looks like a perennial perception of the public sector as one that far from being adequately supportive, is actually obstructing entrepreneurship. Risks-wise, rising costs seem to be somewhat of a never-ending headache, while domestic competition also features in this area, albeit not in a forceful way.”

The Autumn edition of the Limassol Chamber Business Barometer was prepared with the participation of 121 of the chamber’s members (down from 124 in the spring though up from 117 in Autumn 2022), making up 20% of the chamber’s active corporate members who are actually present in the city or district with own offices and staff. As such, it is considered a good sample of the town’s business mood.

Below the two tables refer to the participating companies' turnover and number of staff, providing a comparison with Spring 2023 and Autumn 2022.

Almost all sectors of the Limassol economy were represented, to varying degrees. Especially notable was, again, the presence of the manufacturing industry, with a quarter of all participants coming from that area of entrepreneurial activity. The construction industry and professional services also recorded double-digit participation.

“The current year 2023 is the fourth consecutive one that finds the Cyprus economy, of which Limassol is a major part, affected by ‘imported’ crises, not of its own making, that cannot but have profound effects on the local economy: from Covid19, to the Russian-Ukrainian crisis and on to the latest conflagration in the long-drawn out Middle East melee with the large scale conflict in Gaza and the looming fear of further escalation at regional level,” the Chamber said.

The autumn barometer launched just says after the Middle East conflict broke out, and the chamber said its ramifications are evident in the report’s findings.

“Most of all it shows in what is essentially the litmus test of business psychology: confidence in the economic outlook of Cyprus is decidedly down,” it said.

However, it added, there is still hope on the horizon as there has been an improvement compared with Autumn 2022 and the picture is more encouraging in this respect, suggesting that “the present uneasiness is a product of the regional crisis” and that “things could begin to pick up again once a semblance of normality is restored”.