Ser­vices, con­sumers boost econ sen­ti­ment to 7-year high

Financial Mirror (Cyprus) - - FRONT PAGE -

A rise in con­fi­dence in the ser­vices sec­tor and among con­sumers helped boost the monthly Eco­nomic Sen­ti­ment In­di­ca­tor (ESI) by 6.6 points in Au­gust to 106.9, the high­est level since the in­dex started to take a down­turn in late-2008.

In July, the ESI had dropped to a year-low of 100.3, hav­ing sta­bilised in the first five months of the year in the 103-104 range.

The Eco­nom­ics Re­search Cen­tre of the Univer­sity of Cyprus said that the cli­mate change was driven by mainly pos­i­tive re­sponses to the monthly sur­vey with a dose of op­ti­mism for cur­rent and fu­ture prospects among busi­ness, house­holds and the econ­omy in gen­eral.

The prospects in the con­struc­tion sec­tor also im­proved and were seen as “less neg­a­tive” in Au­gust com­pared to July. On the other hand, the cli­mate in the re­tail sec­tor and man­u­fac­tur­ing wors­ened, due to lower sales in the past quar­ter. How­ever, the fore­casts for in­creased ac­tiv­ity in the re­tail sec­tor sug­gest an im­prove­ment.

The mar­ginal drop in the man­u­fac­tur­ing sec­tor con­fi­dence is linked to re­duced or­ders and a neg­a­tive out­look for fu­ture or­ders in the next quar­ter.

The UCy ERC added that the ESI “sug­gests volatile fluc­tu­a­tions com­pared to 2014 that pre­de­ter­mines a turn­ing point in the econ­omy from one of de­fla­tion to growth of GDP.”

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