The reduction of the IOS is due to the weakening of the business climate in the services and manufacturing sectors, but also to the decline in consumer confidence, according to the Economic Situation Index of the Center for Economic Research of the University of Cyprus.
It added that the decline in sentiment in services stemmed from more pessimistic estimates of next quarter's turnover. Manufacturing sentiment worsened slightly as a result of more negative assessments of the current situation.
In construction, sentiment picked up on more favorable assessments of levels of ongoing projects, as well as more optimistic estimates of employment in the industry next quarter. Retail sentiment strengthened slightly due to an improvement in the current situation (recent sales, current inventories), despite a large downward revision to next quarter's sales estimates, it added.
It is also reported that the consumer climate in April registered a significant deterioration. “Consumers have revised down their expectations about the future financial situation of their households and the country in general. In addition, consumer spending intentions in major markets weakened considerably in April," it added.
The Economic Uncertainty Index rose in April due to an increase in uncertainty in services. Conversely, uncertainty eased in construction and, to a lesser extent, retail trade, while remaining at March levels in manufacturing. Uncertainty among consumers fell for the second month in a row, reaching a three-year low, it added.
Source: KYPE