Confidence in the Cypriot economy remains very fragile despite the fact that the economic climate showed an improvement in July 2013 with the Economic Sentiment Index (ESI) rising by 2.7 points compared with June.
According to the results of the Business and Consumer Survey, conducted by the Economics Research Centre of the University of Cyprus (CypERC), despite the slight increase in the Index, ESI remains at very low levels, which foreshadows the continuation of adverse conditions in the economy in the coming quarters.
The increase is due to the improvement of the climate recorded in services, the retail trade and manufacturing, as well as among consumers.
The exception is the construction sector, where the economic climate continues to be in negative levels like the previous two months.
According to the survey, after the big slump in all confidence indicators in April 2013 because of developments in the banking system, businesses and consumers estimates seem to revert to less negative levels that prevailed in early 2013.
More generally, however, confidence in the Cypriot economy remains very fragile, since there seems to be no clear trend of improvement in all aspects, especially in construction, manufacturing and households.
The Capacity Utilisation Index in manufacturing and services, although it recorded an increase in July in relation to April, remains below July 2012 levels in both areas.
Therefore, the survey concludes, businesses in these sectors are not expected to invest in raising capital or increasing employment.
The research program of recording the economic climate is coordinated by the Center for Economic Research and funded by the European Union.
