A decline in the Economic Situation Index (DOS) was presented in July 2021 by 4.7 points compared to June 2021, according to the Economic Situation Survey conducted by the Center for Economic Research of the University of Cyprus.
The reduction of the DOS came mainly from the decline of the economic climate in services and among consumers. In other sectors, changes in the business climate in July were marginal, with no significant effect on the DOS. “Despite the decline, the DOS remains above its long-term average (100 points), indicating favorable conditions for the recovery of economic activity. However, the recent deterioration of the epidemiological situation seems to have contributed to the increase of uncertainty in July, both between companies in all sectors and among consumers “, the JCC states.
The climate in services deteriorated mainly due to more modest estimates of turnover in the next quarter. In retail, the climate worsened marginally due to a downward revision of sales expectations for the next quarter.
In construction and manufacturing, the business climate has risen marginally, as a result of an upward revision of employment and production expectations respectively. The weakening of consumer confidence was mainly the result of more pessimistic attitudes about the future.
Compared to June, consumers downgraded their expectations for the future economic situation of their households and the country, and were more hesitant about future spending on large markets. “The decline of the DOS after four consecutive months of increases, but also the rise of uncertainty recorded in July in all sectors and among consumers, seems to be linked to the recent deterioration of the epidemiological situation,” the JCC said in a statement.
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