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Cyprus Economic Climate Witnesses Positive Shift in November: CypERC Study

Updated: Dec 1, 2023

In a recent study conducted by the University of Cyprus’ Economic Research Centre (CypERC) in collaboration with RAI Consultants Ltd., it was revealed that Cyprus experienced an upturn in its economic climate in November 2023, compared to October. The Economic Sentiment Indicator (ESI) of the CypERC registered a notable increase of 2.6 units, driven primarily by improvements in the service and construction sectors.

Cyprus Economic Climate Witnesses Positive Shift in November: CypERC Study

The service sector's enhanced climate was attributed to significant improvements in current situation evaluations, including business financial status and turnover. Notably, the boost did not derive from strengthened expectations for demand. Simultaneously, the construction sector experienced a positive shift in its climate due to improved evaluations of ongoing projects and more positive estimations of the workforce for the next quarter.

However, the retail trade sector saw an unchanged business climate compared to October levels. While the current situation, including recent sales and current stocks, showed improvement, this was counterbalanced by deteriorating expectations for sales in the next quarter. Businesses in this sector revised downward their expectations for next quarter sales and estimates for orders to suppliers, with a continued downward trend in expectations for selling prices.

In manufacturing, the economic climate weakened, attributed to more negative evaluations of current orders and pessimistic estimations for future production. Businesses assessed recent production and current orders, including export orders, more negatively compared to October. Expectations for next quarter’s production were also more pessimistic in November.


Consumer sentiment marginally improved in November, with consumers' outlook on the future economic status of their households and the country slightly less negative than the previous month. However, consumer assessments of recent household economic situations were less favorable compared to October, and intentions to spend on major purchases weakened.

Consumers significantly revised their expectations downward for price developments, possibly in response to fiscal measures implemented to curb inflation. Additionally, consumers appeared less pessimistic in November about future labor market conditions, although a significant proportion still anticipated rising unemployment. Consumer assessments of price developments over the last 12 months reflected some easing of upward pressures for the second consecutive month.

The Economic Uncertainty Indicator continued its decline in November, attributed to reduced uncertainty among service sector businesses. However, uncertainty increased among businesses in other sectors, particularly in retail trade, while consumer uncertainty showed a slight increase.

This detailed study offers insights into the multifaceted shifts in Cyprus' economic landscape, providing a comprehensive view of sector-specific dynamics and overall sentiment.



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