Economic confidence in Cyprus saw a notable improvement in October 2025, with the Economic Sentiment Indicator (ESI-CypERC) rising by 2.0 points from the previous month’s reading. According to the Economic Research Center (ERC) of the University of Cyprus, this upward movement was primarily fueled by renewed optimism in key business sectors.
Sectoral Confidence: Where Strength Lies
The overall boost to the ESI was underpinned by robust improvements in two major areas:
- Services Sector: The confidence indicator for the dominant services sector reversed two months of decline, showing a significant rally. The gain was broad-based, with firms giving better assessments of their current business situation, recent turnover, and positive forecasts for expected turnover.
- Construction Sector: Confidence in construction also strengthened. This positive shift was driven by better perceptions of current order book levels and more optimistic employment expectations by firms in the sector.
Areas of Weakness
While the overall sentiment improved, confidence did not rise across the board, with two sectors and consumers expressing less optimism:
- Retail Trade: The Retail Trade Confidence Indicator declined. This was a result of firms’ less favorable views on recent sales performance and stock volumes, alongside a further reduction in sales expectations.
- Industry: The Industrial Confidence Indicator registered a small decline. This was attributed to unfavorable assessments of current order book levels and downward revisions in production expectations.
- Consumer Confidence: The Consumer Confidence Indicator also decreased, halting a two-month recovery. Consumers reported a deterioration in their recent financial situation, weaker intentions to make major purchases, and worsening expectations regarding the general economic conditions in Cyprus.
Economic Uncertainty Recedes
Despite the drop in consumer confidence, the Economic Uncertainty Indicator for Cyprus decreased in October. This was a result of reduced business uncertainty in all sectors, with the sole exception being industry, where business uncertainty saw a slight increase. Consumer uncertainty also rose but was reported to remain at a relatively low level across all income categories.
Source: Stockwatch.com.cy