Business and consumer confidence fall on output, pessimism
The economic sentiment deteriorated in May as the Economic Sentiment Indicator (ESICypERC) declined by 2.4 points from April to 109.5 (the same level as in March), as a result of the worsening of business confidence in services and construction, and the weakening of consumer confidence. However, year-on-year, the ESI is still up 5.9 points.
According to the monthly survey by the University of Cyprus Economics Research Centre the Services Confidence Indicator fell due to firms’ less positive assessments of past business situation and demand as well as to more pessimistic views regarding firms’ turnover over the next three months. The Construction Confidence Indicator declined because of more negative assessments of order books and employment plans.
The ERC survey added that the Consumer Confidence Indicator deteriorated as a result of (i) consumers’ more pessimistic views regarding the future financial situation of their household and the general economic situation in Cyprus, and (ii) a decline in the likelihood of saving over the next 12 months. Finally, the Retail Trade and Industry Confidence Indicators remained unchanged as the improvement in the assessments of recent trends was offset by a deterioration of firms’ expectations.