Nicosia, Cyprus. Cyprus’ economic climate weakened in February as a downturn in the services sector weighed on sentiment and economic uncertainty increased, according to the University of Cyprus’ Economic Research Centre (CypCER). The Economic Sentiment Indicator fell by 1.3 points from January, mainly due to a decline in services and, to a lesser extent, lower consumer confidence.
Services sector weighs on sentiment
CypCER said the weakening in services reflected more unfavourable assessments of the recent course of businesses, particularly their financial situation and turnover. Services firms, however, appeared more optimistic about turnover in the next quarter, giving more positive estimates than in the previous two months.
Other sectors show improvement
The business climate strengthened in retail trade, construction and manufacturing, supported by improved assessments of the current situation and higher expectations for activity in the coming quarter.
Consumer sentiment declines despite favourable current assessments
Consumer sentiment declined in February as expectations regarding households’ future financial situation weakened and intentions to make large purchases fell. The survey found that assessments of the current financial situation of households remained “extremely favourable.”
Economic uncertainty rises after four months of decline
The Economic Uncertainty Indicator rose in February after four consecutive months of decline, reflecting increased uncertainty among consumers and businesses in all sectors except construction. CypCER said consumers and businesses, excluding those in construction, faced greater difficulty than in previous months in predicting their economic situation.
Uncertainty remains relatively low overall
CypCER concluded that economic uncertainty in Cyprus remains relatively low, particularly among consumers and businesses in the services and construction sectors.
How do you expect changes in economic uncertainty to affect household spending decisions in the coming months?
