In October 2024, the economic climate in Cyprus improved compared to September 2024, primarily due to an upswing in business sentiment in the services sector, as reported by the University of Cyprus’ Economic Research Center (ERC).

Additionally, economic uncertainty decreased for the second consecutive month, except among consumers.

"The significant improvement in sentiment and simultaneous decline in uncertainty reflect positive developments over recent months, which have solidified in October and favorably impacted demand for services, even though demand for products in other sectors or consumer sentiment has not been similarly affected," the report highlights.

Specifically, according to the ERC’s economic survey, the Economic Sentiment Indicator rose by 4.7 points in October 2024 compared to September 2024.

The ERC noted that “the significant rise in sentiment in services in October was due to more favorable responses from businesses regarding their recent economic situation and, notably, their turnover for the last and upcoming quarters."

The report also indicated that sentiment in construction showed a slight improvement as companies assessed their ongoing projects more favorably and revised their employment projections upward.

Conversely, in manufacturing, sentiment weakened, according to the ERC, “due to less favorable evaluations of current orders and final product stocks, as well as more pessimistic projections for production in the next quarter."

Furthermore, retail sentiment marginally declined in October, attributed to downward adjustments in sales expectations for the next quarter.

Consumer confidence also weakened slightly in October, with a small decline in consumers’ evaluations of the financial situation of their households and the country.

"However, consumers' intentions to make major purchases in the coming months were strengthened in October," the ERC notes.

The Economic Uncertainty Index for Cyprus, according to the ERC, declined for the second consecutive month in October, “mainly due to reduced uncertainty in services, with smaller declines in construction and manufacturing."

However, it added that “uncertainty among consumers rose, with lower-income households facing increased difficulty in predicting their economic situation."

“Households in the middle 50% of the income distribution faced a higher degree of difficulty in October in forecasting their economic situation, while households in the lowest 25% continue to experience the highest levels of uncertainty,” the ERC emphasizes.