Limassol business “not as gloomy” as last year, report shows

Business in Limassol is better this year

by Kyriacos Nicolaou and Andrew Rosenbaum

Business in Limassol is “not as gloomy” this year as it was in 2020, according to a survey of businesses in the city. But it is still not back to 2019 levels.

The services sector seems to be thriving despite everything, according to the report.

The “BarometerSpring 2021” survey, which queried 133 businesses in Limassol – and which therefore obtained a solid representative view – showed that, at virtually all levels – employment, intended investments, sales forecasts, overall confidence in the economy, there has been improvement.

“However, equally certain is the fact that pre-pandemic levels have not been achieved, not even neared. Suffice it here to say that in the last pre-pandemic edition of our Barometer, in Autumn 2019, we had already identified a certain gloominess, what we had referred to back then as ‘’contraction at the level of expectations for the future.’’ Spring 2021 is not as gloomy as Autumn 2020. But it is certainly gloomier than Autumn 2019.”

Confidence has unquestionably improved, the report noted.

“Another positive element of the Spring 2021 findings is that in response to a question asked for the first time, as to the likelihood of certain developments emanating from the present crisis, extreme scenarios like a complete collapse of the Cyprus economy or a breakdown of law and order, are invariably seen as highly improbable,” according to the report.

But Limassol companies are tired of working from home.

“Companies are quite unhappy with the ‘working from home’ option, which they view as inconvenient and conducive to reduced productivity. To that extent, this regime cannot be expected to outlive the present crisis.

As sales have not recovered to 2019 levels, this is a primary concern for the manufacturing, commerce, and technology sectors. There is also still marked concern in these sectors about employment, both in terms of a shortage of talent and about high labour costs. The services sector is equally affected by these factors, according to the report.

One of the areas of greatest concern is how businesses dealt with government agencies and organisations. Of private Limassol businesses surveyed, a massive 45.9 per cent expressed dissatisfaction with relations with the public sector.

In more detail, 27.1 per cent of businesses said that the public sector’s support towards private businesses was ‘little’, while 18.8 per cent of businesses said that support was ‘very little.’ What’s more, 81.1 per cent said they had been unsuccessful at public procurement tenders.

“When it comes to new investments, comparisons between Autumn 2020 and Spring 2021, show decisive improvement in the manufacturing sector and more moderate such in commerce and services, whereas the figures for technology are little changed. As for projected sales in Cyprus, manufacturing, commerce and technology expect to do better. The corresponding figure for services, on the other hand, is somewhat less than six months before, though one must factor in that unlike the other sectors, services had displayed an amazing degree of resilience in Autumn 2020,” the report said.

In terms of the energy sector and how it affects businesses and their competitiveness, 39.8 per cent of businesses said that they are being affected to either a ‘high degree’ (23.3 per cent) or to a ‘very high degree’ (16.5 per cent).

This integrates into concerns about overall rising costs and rising commodity prices. This seems to be felt strongly enough to have pushed aside the almost stereotypical prevalent answer (‘’further banking crisis’’) of almost all previous editions of our Barometer.

The 10th edition of the Limassol Chamber Business Barometer is scheduled to be launched in Autumn 2021