Services, retail boost economic sentiment in July

Economic sentiment in Cyprus improved for the fourth consecutive month in July, on improved business confidence in the services and retail trade sectors, according to the benchmark index compiled by the Economics Research Centre of the University of Cyprus. The Economic Sentiment Indicator (ESI-CypERC) increased by 0.7 points to 101.5 compared with June, but remained far below the monthly index throughout the past 12 months. This was an improvement from 100.6 in May, April’s 96.4 and 94.3 in March, the lowest in more than a year. A single drone attack on the British base of Akrotiri in March had a direct impact on the tourism sector, with hotel and airline booking cancellations, and a trickle-down effect on retail and consumer spending. As regards the sub-categories of the July ESI, the increase in the Services Confidence Indicator resulted mostly from upward revisions in firms’ turnover expectations. The Retail Trade Confidence Indicator rose for the second consecutive month, owing to improved assessments of firms’ current stock levels and upward revisions in sales expectations. The Construction Confidence Indicator declined marginally, mainly reflecting firms’ less favourable views on the current level of overall order books. The decline in the Industry Confidence Indicator was largely driven by less favourable assessments of the current level of finished product stocks as well as by lower production expectations. The decrease in the Consumer Confidence Indicator was primarily due to consumers’ more negative views on their financial situation. In July, consumers’ assessments of their recent financial situation deteriorated further and their expectations regarding their future financial situation weakened. The Economic Uncertainty Indicator for Cyprus decreased in July as a result of lower business uncertainty among firms in the services, retail trade and construction sectors. In contrast, consumer uncertainty increased for the second month in a row, with low-income households recording the largest increase in uncertainty about their future financial situation among all income groups. The post Services, retail boost economic sentiment in July appeared first on Financial Mirror.