Eco­nomic sen­ti­ment de­te­ri­o­rates in Au­gust

Financial Mirror (Cyprus) - - FRONT PAGE -

Eco­nomic sen­ti­ment in Cyprus de­te­ri­o­rated in Au­gust as the Eco­nomic Sen­ti­ment In­di­ca­tor com­piled by the Univer­sity of Cyprus (ESICypERC) de­creased by 7 points com­pared with July, to the same level in Septem­ber last year.

The de­cline re­sulted mainly from the weak­en­ing of busi­ness con­fi­dence in ser­vices. The de­te­ri­o­ra­tion in eco­nomic con­fi­dence in con­struc­tion and in­dus­try as well as among con­sumers had a smaller im­pact on the ESI-CypERC in­dex.

The Ser­vices Con­fi­dence In­di­ca­tor fell sharply due to firms’ less op­ti­mistic as­sess­ments of re­cent busi­ness con­di­tions (i.e. busi­ness sit­u­a­tion and de­mand over the last three months) and down­ward re­vi­sions of de­mand ex­pec­ta­tions. The de­te­ri­o­ra­tion in ser­vices con­fi­dence was pri­mar­ily driven by the less pos­i­tive re­sponses recorded in Au­gust in the sub-sec­tors of fi­nan­cial ser­vices and ac­tiv­i­ties aux­il­iary to fi­nan­cial and in­sur­ance ser­vices. Also, the down­ward re­vi­sions of de­mand ex­pec­ta­tions in the sub­sec­tors of ho­tels, ware­hous­ing and sup­port ac­tiv­i­ties for trans­porta­tion had a large neg­a­tive ef­fect on ser­vices con­fi­dence.

The Re­tail Trade Con­fi­dence In­di­ca­tor re­mained un­changed as the im­prove­ment in firms’ as­sess­ments con­cern­ing past sales was off­set by the de­te­ri­o­ra­tion in re­spon­dents’ views on cur­rent stock vol­umes and fu­ture sales. The Con­struc­tion Con­fi­dence In­di­ca­tor de­creased slightly due to down­ward re­vi­sions of firms’ fu­ture em­ploy­ment plans.

The In­dus­try Con­fi­dence In­di­ca­tor de­clined as a re­sult of the de­te­ri­o­ra­tion in firms’ as­sess­ments of the stock of fin­ished prod­ucts and the down­ward re­vi­sion of pro­duc­tion ex­pec­ta­tions.

The Con­sumer Con­fi­dence In­di­ca­tor de­creased marginally as con­sumers were less op­ti­mistic about their fu­ture fi­nan­cial sit­u­a­tion and their fu­ture sav­ings.

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