Economic sentiment in Cyprus dipped significantly this month, reflecting weaker business confidence in the services and construction sectors, according to the latest survey by the University of Cyprus published on Tuesday.

The Economics Research Centre of the university reported that in August, economic sentiment deteriorated by 1.8 points compared to the previous month.

“The sharp decline in the Services Confidence Indicator was driven by less favourable assessments of firms’ recent performance (business situation, turnover), as well as weaker turnover expectations,” the survey found.

The Economic Sentiment Indicator (ESI) clocked at 103.7 points in August – the lowest since the same month last year, according to the table provided.

The ESI is a composite measure reflecting firms’ and consumers’ perceptions and expectations about economic variables like production, demand, employment, and prices. It is calculated from responses to business and consumer surveys, which gauge optimism and pessimism by comparing positive and negative answers to questions about past and future economic conditions.

Another finding in the latest survey was a fall in the Construction Confidence Indicator, due to “a deterioration in firms’ views on their order book levels”.

The Economic Uncertainty Indicator declined further in August, reflecting lower business uncertainty – particularly in the services sector – as well as reduced consumer uncertainty.

At the same time, the Consumer Confidence Indicator rose in August, as all four components of this index improved.

“More specifically, consumers expressed more favourable views on their recent and future financial situation. Additionally, consumers revised their expectations about economic conditions in Cyprus upwards. Finally, consumers’ intentions to make major purchases strengthened in August.”

And the Retail Trade Confidence Indicator increased for the second month in a row, “as a result of improved assessments of stock levels and stronger sales expectations”.

The full report is available here.