In May 2020, economic sentiment in Cyprus deteriorated further as the Economic Sentiment Indicator (ESI-CypERC) decreased by 4.1 points compared with April 2020, due to measures imposed to control the spread of COVID-19.
According to a report by the Economics Research Centre of the University of Cyprus the decrease in ESI-CypERC was driven by additional confidence losses in services and retail trade, and to a smaller extent, by a weakening of confidence in construction. The decline in ESI-CypERC in May is mainly related to more negative assessments of the recent economic conditions than to worsening expectations.
The decrease in the Services Confidence Indicator resulted from firms’ less favourable views on their past business situation and past demand.
The decline in the Retail Trade Confidence Indicator was due to firms’ more negative assessments of their past sales and more adverse views on their stock levels.
The Construction Confidence Indicator decreased as a result of more negative assessments of the level of order books and downward revisions in employment expectations.
The Industry Confidence Indicator increased due to less adverse views on the current levels of stocks of finished products and upward revisions in production expectations.
The increase in Consumer Confidence Indicator was mainly driven by upward revisions in consumers’ expectations about their financial conditions and the economic conditions in Cyprus.
New survey data, which aim at measuring economic uncertainty, show that the highest levels of uncertainty in May were registered in the sectors of construction and industry. The largest increase in the level of uncertainty compared with 2019 was recorded in the services sector.