Cyprus’ economic climate saw an upswing in May, with the Economic Sentiment Index (ESI) increasing by 1.6 points when compared to April 2024.

According to the Economics Research Centre (CypERC) of the University of Cyprus, this rise in the ESI was primarily due to a stronger business climate in the services sector.

The improvement in sentiment within the services sector in May was largely driven by more positive assessments of firms’ recent economic situations and turnover over the last quarter.

However, the retail trade sector experienced a slight decline in sentiment. This downturn was attributed to further deteriorations in assessments of recent sales and increasingly pessimistic views on future sales.

Additionally, sentiment within the construction sector weakened, which was a result of more negative perceptions of ongoing projects and more subdued expectations regarding employee numbers.

In contrast, the manufacturing sector’s sentiment remained unchanged from April. While there was a deterioration in the current situation, specifically regarding current orders and finished goods inventories, this was balanced by strengthened production expectations.

Consumer outlook saw a marginal improvement in May. Consumers revised upwards their expectations for the future economic situation of their households and the country in general.

Nonetheless, there was a noticeable hesitance among consumers, compared to previous months, about making large purchases in the coming months.

Furthermore, the Economic Uncertainty Index declined in May due to reduced uncertainty among consumers and businesses across all sectors, except construction.

This survey of economic sentiment in Cyprus is conducted by the Economics Research Centre (CypERC) of the University of Cyprus, in collaboration with RAI Consultants Ltd, as part of the Joint Harmonised European Union Programme of Business and Consumer Surveys.

This project is funded by the European Union, the Ministry of Finance, and the University of Cyprus.