Tech and professional activities buffer Cyprus against tourism slump

Services production across the euro area fell in June as the sector’s recovery from the previous month’s growth lost momentum, while data from Cyprus showed a more mixed picture, with professional services and transport expanding but accommodation and administrative activities weakening.

According to a report from Eurostat, seasonally adjusted services production fell by 0.3 per cent in the euro area and 0.2 per cent across the EU in June, compared with May.

That followed growth of 0.7 per cent in both areas in May, the report added.

Compared with June 2025, however, services production was 1.5 per cent higher in both the euro area and the EU.

The monthly decline in the euro area was driven mainly by real estate, which fell 1 per cent, professional, scientific and technical activities, down 0.7 per cent, and administrative and support services, which dropped 0.4 per cent.

These falls were partly offset by growth in information and communication services, which rose 0.8 per cent, while transport and storage and accommodation and food services each increased 0.1 per cent.

Across the EU, information and communication services rose 0.7 per cent and accommodation and food services increased 0.1 per cent, while transport and storage was unchanged.

Among member states with available data, Latvia recorded the sharpest monthly decline at 3.7 per cent, followed by Germany at 2.1 per cent and Bulgaria at 1.1 per cent.

Luxembourg recorded the strongest increase at 7.8 per cent, followed by Portugal at 3.1 per cent and Lithuania at 2.6 per cent.

On an annual basis, information and communication was the strongest-performing major service category, increasing 5.2 per cent in the euro area and 4.9 per cent in the EU.

Transport and storage also expanded, rising 3 per cent in the euro area and 2.4 per cent in the EU.

Accommodation and food services, by contrast, fell 1.4 per cent in the euro area and 1.3 per cent in the EU, while administrative and support services declined 0.4 per cent and 0.2 per cent respectively.

Among member states, Greece recorded the strongest annual increase at 9.3 per cent, followed by Slovenia at 8.5 per cent and Estonia and Lithuania at 7.1 per cent.

Denmark recorded the largest annual decline at 6.5 per cent, while Germany, Italy and Austria also posted smaller falls.

In Cyprus, Cystat data for the second quarter showed that services-sector turnover was moving in sharply different directions between industries.

Professional, scientific and technical activities recorded the strongest growth, with turnover up 3.4 per cent compared with the second quarter of 2025.

Transport and storage and information and communication activities both increased by 2.1 per cent, while real estate activities rose 1.6 per cent.

Accommodation and food services went in the opposite direction, falling 3.1 per cent, while administrative and support services declined 2.2 per cent.

The accommodation figures were particularly weak, with turnover in accommodation alone falling 10.1 per cent during the quarter, although food and beverage services increased 4.5 per cent.

Transport performance was also uneven, with land transport and transport via pipelines rising 8.3 per cent, while water transport fell 5.9 per cent and air transport dropped 5.8 per cent.

Information services provided a major boost to Cyprus’ information and communication sector, with turnover surging 57.5 per cent during the quarter.

This was partly offset by a 19.2 per cent fall in motion picture, video and television production, sound recording and music publishing, alongside declines in programming and broadcasting and telecommunications.

Professional services were supported by a 9 per cent increase in architectural and engineering activities, including technical testing and analysis, while advertising and market research rose 7.2 per cent and legal and accounting activities increased 4.6 per cent.

Travel agencies and related reservation services were among the weakest areas of Cyprus’ services economy, with turnover falling 13.8 per cent during the quarter.

Rental and leasing activities declined 9.4 per cent and employment activities fell 1.4 per cent, although office and business support services increased 3.4 per cent.

Looking at the first six months of 2026, professional, scientific and technical activities remained the strongest-performing major category in Cyprus, rising 3.5 per cent year on year.

Transport and storage increased 2.8 per cent, real estate 2.1 per cent and information and communication 1.3 per cent.

Accommodation and food services fell 0.7 per cent over the period, while administrative and support services declined 1 per cent.

Within transport, land transport and pipelines increased 7.8 per cent during the first half, while air transport was still 3.9 per cent higher despite its second-quarter decline.

Information services rose 47.6 per cent over the six months, while architectural and engineering activities increased 11.8 per cent and advertising and market research rose 7.5 per cent.

The data point to a resilient but uneven services economy in Cyprus, with professional, transport and technology-related activities providing growth while tourism-related accommodation and several business support activities remained under pressure.