Local
articles | 27 November 2014

Economic sentiment returns to late 2008 levels

Business and consumer confidence rose in November 2014 by 3.11 points compared to the month before and reached its highest level since the fourth quarter of 2008, the University of Cyprus said.

Business confidence rose in all sectors except manufacturing, the Economic Research Centre of the university said in an emailed statement today.

Improved expectations led to an increase of confidence in the service sector in November, even as compared to the month before service companies evaluated their financial situation as negative, the report said. Companies in the service sector evaluated demand in the recent three months as “marginally more positive”, while they expect to employ more staff in the next two months even as they expect to decrease their prices.

Confidence among retailers rose this month as companies in the sector evaluated their current situation as improved, and intend to increase their stock as well as orders to suppliers, the statement said. Fewer companies expected to reduce their staffing levels while most retailers said they intended to reduce prices.

Improved expectations led also to better sentiment among construction companies in November, as the number of those who saw their activity decrease was smaller compared to the month before, the university said. While the majority of the construction companies deem current overall order book below the usual, both the number of those intending to reduce staff and prices in the three months to come dropped compared to October.

Confidence in manufacturing fell amid worse evaluations of the current situation in November, the university’s report said. While output in recent months remained unchanged compared to October, most companies reported falling order volume and exports.

Finally, consumer confidence rose in November as households evaluated their financial situation over the past 12 months as well as their expectations for their financial situation next year as “less negative,” the report said. While a considerable group among consumers expect unemployment to increase, their overall sentiment indicates that they expect the unemployment rate to fall.

According to the university’s report, fewer consumers saw prices fall in recent months even as most of them expect them to fall within the next 12 months, while an increased number intends to spend more in the next 12 months.

Source: CyprusMail

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