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Cyprus service sector — key for economy — sees drop

Photo by Dado Ruvic/Illustration

Employment in services dropped in the second quarter of this year, showing that this key area of the Cyprus economy – comprising $13.7 billion in exports in 2019 – is slowing down.

For the second quarter of 2020, total employment decreased by 1.1 per cent compared with the corresponding quarter of 2019, data from the Cyprus Statistical Service revealed on Friday.

The total employment for the second quarter of 2020 is estimated at 435,693 persons, of which 385,737 are employees and 49.956 are self-employed, the service said. In the same period last year, the employment rate was 440.539.

The most significant percentage decreases, according to the service, were observed in the economic activities of accommodation and food service activities, transportation and storage, arts, entertainment and recreation, and other service activities. This is due to the coronavirus restriction measures limiting human to human contact to avoid the spread of the virus.

Apart from fewer employees, those working completed less hours than the same period last year.

Actual hours worked for the second quarter of 2020 are estimated at 173,972 thousand; a decrease of 13.9 per cent compared with the corresponding quarter of 2019.

The most significant percentage decreases in the working hours were observed in the economic activities of accommodation and food service activities, arts, entertainment and recreation, other service activities and administrative and support service activities.

To further support those businesses linked to tourism and others such as night clubs, that remain shut because of Covid measures, the government will continue the state support measures until October with the requirement those will not lay off any staff until the end of the year.

The unemployment rate rose slightly to 7.1 per cent compared with 6.7 per cent last year, Finance Minister Constantinos Petrides said. However, the percentage is expected to rise after the end of state support measures for the coronavirus.

For that reason, the labour ministry said it plans to implement pay subsidy schemes to encourage the recruitment of unemployed people starting November.

 



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