Cyprus’ Composite Leading Economic Index (CCLEI) continued to climb in August 2023, although at a reduced rate, according to a report by the Economics Research Centre (ERC) at the University of Cyprus. The slowdown is primarily attributed to factors such as declining electricity production and negative trends in the Eurozone's Economic Sentiment Indicator (ESI).

The ERC revealed that the CCLEI increased by 2.2% year-over-year in August 2023, compared to increases of 2.4% and 2.0% in July and June of the same year, respectively.

The ERC stated that the slower pace in August was partly due to a consistent decrease in the temperature-adjusted volume of electricity production since May 2023. Additionally, the ESI for the Eurozone showed a negative year-over-year growth rate in August 2023, contrasting with a positive year-over-year trend for Cyprus' own ESI.

"The heightened level of uncertainty in the European economic landscape significantly influences the growth prospects of the Cypriot economy," said the ERC. Despite these challenges, sectors such as tourism and retail trade within Cyprus continued to post favorable year-over-year growth rates, helping to buoy the CCLEI.

Even amid ongoing uncertainties, the ERC pointed out that the CCLEI managed to maintain its upward trend in August 2023. "Most domestic sectors that contribute to the CCLEI have shown positive performance, ensuring a sustained positive year-over-year growth rate for the index," the ERC noted. However, the slowing growth rate also reflects broader instabilities in the international economic and geopolitical landscape.

In related economic news, despite a decline in the number of building permits issued in Cyprus during the first half of 2023, the value and total area of these permits saw an increase, according to data from the Statistical Service of Cyprus (Cystat).

From January to June 2023, municipal authorities and district administration offices issued 3,608 building permits, down 7.4% compared to 3,898 permits during the same period in 2022. However, these permits represent a total value of €1.42 billion, marking a 16.5% increase over the €1.22 billion recorded in the first half of 2022.

Additionally, the total area covered by these permits grew by 3% year-on-year, and the number of dwelling units increased by 2.6%, totaling 5,276 units.

Cystat pointed out that building permits serve as a leading indicator of upcoming activity in the construction sector, signaling the industry's potential direction.

When zeroing in on the month of June alone, 610 building permits were issued, a slight dip from the 626 permits in June 2022. Despite the decrease in quantity, the total value of the permits in June 2023 reached €251.1 million, up from €220.5 million in June 2022.

However, the total area for June's permits showed a marginal decline, covering 200,500 square meters as opposed to 202,070 square meters in June of the previous year. Cystat added that these permits account for the construction of 1,141 dwelling units.

Meanwhile, unemployment decreased to under 6% in the second quarter of 2023, even as the labour force expanded by 2.45% over the same period, according to the latest Labour Force Survey released by the Statistical Service.

The total labour force reached 494,246 individuals in Q2 2023, constituting 65.6% of the population. This marked an increase from 482,385 individuals, or 65.1% of the population, recorded in the same quarter of 2022.

Employment numbers rose to 464,878, with a 61.7% employment rate. By gender, 66.3% of males and 57.5% of females were employed. In comparison, the employment figures for the same period last year stood at 449,482 individuals with a rate of 60.6%.

The number of unemployed individuals dropped to 29,367, resulting in a 5.9% unemployment rate. Broken down by gender, 6.0% of males and 5.8% of females were unemployed. These figures indicate a decline from 32,903 individuals or a 6.8% rate in the second quarter of 2022.

For individuals aged 20-64, the employment rate reached 79.2%, with 84.0% for males and 74.8% for females. Meanwhile, the employment rate for the 55-64 age bracket rose to 67.2%, up from 65.9% in the corresponding quarter last year.

The largest percentage of employed individuals worked in the services sector (81.3%), followed by manufacturing (16.6%), and agriculture (2.1%). These figures were slightly different in Q2 2022, when 80.7% were in services, 16.8% in manufacturing, and 2.5% in agriculture.

The share of part-time workers stood at 9.0%, or 41,671 individuals, a drop from 10.9% during the same quarter in 2022. Employees comprised 89.6% of the total number of employed individuals, with 13.4% in temporary positions.

Among youth aged 15-24, the unemployment rate fell to 15.6%. The male unemployment rate in this age group was 18.2%, while the female rate stood at 13.0%. These rates have improved compared to 17.6% in Q2 2022.

Nearly half (49.3%) of unemployed individuals had been job-searching for less than six months. Another 17.8% were unemployed for 6-11 months, while 32.9% were classified as long-term unemployed.