Cyprus productivity growth concentrated in ICT, CypERC report finds

Nicosia, Cyprus. Productivity growth in Cyprus has remained concentrated in a small number of sectors over the past three decades, with information and communications technology recording the strongest gains, according to the Economics Research Centre of the University of Cyprus (CypERC).

Sector differences

The report examined labour productivity and labour compensation across 10 major sectors between 1996 and 2025. It found that labour productivity increased by an average of 1.44 per cent annually across the economy.

The overall figure, however, masked substantial differences between sectors, with several traditional industries recording long-term productivity declines.

Information and communication recorded average annual labour productivity growth of 5.27 per cent, followed by financial and insurance activities at 2.33 per cent and wholesale and retail trade at 1.61 per cent.

Labour productivity declined by an average of 0.90 per cent annually in agriculture, forestry and fishing, 0.84 per cent in real estate activities and 0.82 per cent in arts and other services. Construction recorded a smaller average annual decline of 0.10 per cent.

Total factor productivity

CypERC said the findings showed that productivity improvements were concentrated in a relatively small number of sectors.

The same pattern emerged from total factor productivity estimates, which measure the efficiency with which labour, capital and other inputs are combined.

Total factor productivity increased by an average of 0.99 per cent annually across the economy through 2024, while information and communication recorded growth of 4.38 per cent.

Agriculture, construction, industry, and arts and other services recorded negative total factor productivity growth.