Cyprus Mail

Economic sentiment dropped before Brexit vote

Economic sentiment in Cyprus deteriorated in June with the economic sentiment indicator falling, for the second month in a row, by 1.5 points to 108, the lowest value this year, the University of Cyprus said.

The deteriorated sentiment reflected a business confidence drop in the areas of services, retail trade and manufacturing, the university’s Economic Research Centre said in a statement on its website on Tuesday. A source at the ERC said that the survey was completed by June 15 and is therefore not taking into account the impact of the UK referendum in which voters decided to leave the European Union.

Interviewed service companies said in June that they expect a drop in turnover over the next three months, after they saw their business situation worsen and demand drop in the past three months, the ERC said. Retail companies said that they gave “more negative responses” regarding their sales and stocks. The drop in industry confidence indicator resulted from a downward revision of the interviewed companies’ assessments of their production plans over the next three months.

On the other hand, construction companies were more optimistic this month about their current level of order books and said they intended to hire more staff, the ERC said.

Finally, the consumer confidence indicator rose this month on more optimism regarding the future of the households’ financial situation and Cyprus’s economy, including employment and were less negative toward savings, the ERC said.

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