Subtle Uptick in Economic Sentiment in Cyprus
In a recent assessment by the University of Cyprus’ Economic Research Centre (CypERC), economic sentiment in Cyprus has shown a slight improvement. The Economic Sentiment Indicator (ESI) edged up by 0.8 points in April from the previous month, signaling a cautiously optimistic business outlook.
The CypERC’s analysis revealed that this positive shift was primarily fueled by enhanced confidence across various business sectors. Notably, the manufacturing and construction sectors led the charge with the most significant gains in sentiment. Manufacturers expressed more positive views on current order books and inventory levels, alongside brighter production forecasts for the coming quarter.
In the realm of construction, firms were encouraged by their current project pipelines and anticipated hiring, contributing to the sector’s robust sentiment. Meanwhile, the service sector’s sentiment saw a modest boost, hinging on hopeful turnover expectations for the next quarter.
Retail trade also experienced a slight uptick in sentiment, buoyed by better evaluations of inventory positions and sales prospects. However, despite these positive signals from the business community, consumer confidence took a step back. Households expressed concerns over their financial future and the broader economic landscape.
Adding to the mixed picture was a small rise in the Economic Policy Uncertainty (EPU) index, reflecting growing unease within the services and retail sectors. In contrast, uncertainty levels in construction showed a decrease, and manufacturing sector uncertainty remained stable but elevated.
Price expectations are another area to watch. Retailers are anticipating higher sales prices, aligning with consumers’ expectations that have reached a six-month peak. This could suggest an emerging trend of inflationary pressures within the Cypriot economy.
Overall, while economic sentiment in Cyprus is on a gentle incline, the landscape remains nuanced with varying degrees of optimism and caution across different sectors.
