Economic sentiment deteriorates in November

Economic sentiment in Cyprus deteriorated in November but remained at a fairly high level, indicating a continuation of favourable conditions in the Cypriot economy in the coming months, the Economics Research Centre of the Department of Economics at the University of Cyprus said.

In particular, the Economic Sentiment Indicator (ESI-CypERC) decreased by 1.3 points compared to October 2024.

The decrease in the indicator was driven by weaker business confidence in services, retail trade and construction, the Economics Research Centre said in its November Business and Consumer Surveys bulletin, adding however that the indicator remains at a fairly high level, indicating a continuation of favourable conditions in the Cypriot economy in the coming months.

It is noted that despite the decline in the Services Confidence Indicator in November, owing to less favourable assessments of firms’ recent performance, business confidence in services has remained strong, supported by optimistic views on expected turnover.

Specifically, the Retail Trade Confidence Indicator fell for the second month in a row because of new downward revisions in sale expectations, the Construction Confidence Indicator decreased marginally, as firms assessed the current levels of their order books more negatively, while in contrast, a small increase in the Industry Confidence Indicator resulted from improved views on the current level of overall order books and the stocks of finished products.

It is added that the Consumer Confidence Indicator increased in November, as all four components of the indicator improved. More specifically, consumers expressed more favourable views on their recent and future financial situation; also, consumers revised their expectations about the economic conditions in Cyprus upwards. Finally, consumers’ intentions to make major purchases strengthened in November.

The Economic Uncertainty Indicator for Cyprus decreased for the third consecutive month in November, registering its lowest value in almost five years, driven by lower uncertainty about firms’ future business situation, especially in services and construction, the Economics Research Centre concludes.