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The economic climate improved in December 2018 by 3.4 points, assisted by the improvement of the business climate in services and manufacturing industry.

The Economic Sentiment Indicator, composed by the Economics Research Centre of the University of Cyprus, stood during the last month of 2018 at 118.6 points, compared to 115.2 points in November 2018. The Index reached a record high on January 2018 with 119.8 points.

According to the Economics Research Centre, the Index reached on average 115.4 points throughout 2018, compared to 114.8 in 2017.

The reason for this rise is, according to the Centre, the significant improvement of business trust in constructions, in comparison to 2017.

The Centre also notes that high levels of economic trust achieved in Cyprus are expected to act favorably for economic activity in the following quarters.

The Centre also says that the rise of the Index is mostly attributed to the improvement of the business climate in services and industry, while the climate’s marginal improvement in constructions and among consumers had no significant impact.

The rise of the business climate in services is related to more positive reviews of the current economic situation and better turnover for businesses in the last quarter. Moreover, it has to do with enhanced expectations for an increased turnover in the next quarter.

The upgraded climate in the manufacturing industry is due to improved evaluations about current stock and more positive estimates for the future production, it is added.

The climate in construction improved only marginally, due to less negative reviews of ongoing projects. The climate deteriorated in retail, due to less favorable reviews of the current situation (sales, stock) and more composed estimates about sales in the next quarter.

Consumers reviewed their expectations slightly upwards regarding the future economic situation of their households and of Cyprus in general, contributing thus to a marginal improvement of consumer sentiment.

Source: Stockwatch