In January 2026, economic sentiment in Cyprus deteriorated slightly, as the Economic Sentiment Indicator (ESI-CypERC) declined by 0.2 points compared with December 2025, according to the Business and Consumer Surveys conducted by the Economics Research Centre of the University of Cyprus (CypERC).
This marginal decline was driven by lower business confidence mainly in the construction sector and, to a lesser extent, in the retail trade and industrial sectors, CypERC notes in a press release.
The Services Confidence Indicator increased further, reflecting improvements in assessments of recent and future turnover.
The decrease in the Retail Trade Confidence Indicator resulted from a deterioration in firms’ views on their current stock volumes and downward revisions in their sales expectations.
Moreover, the Construction Confidence Indicator declined markedly, as firms’ views on order book levels and expected employment moderated. The decline reflects a shift from positive assessments in previous months to neutral evaluations in January.
Most firms described current overall order book levels as sufficient (normal for the season) and expected total employment to remain unchanged over the next three months. The survey results suggest that the construction sector is operating close to full capacity, with labour shortages constraining further growth in building activity. In addition, weather conditions were reported more frequently in January than in December as a factor limiting building activity.
According to CypERC, the decline in the Industry Confidence Indicator was driven by less favourable assessments of the current stock levels and downward revisions in production expectations.
The Consumer Confidence Indicator remained unchanged in January, holding the relatively high level reached in December. Consumers were more optimistic about their future financial situation but less optimistic regarding the country’s economic conditions, while also showing weaker intentions to make major purchases in the near future.
The Economic Uncertainty Indicator for Cyprus declined for the fourth consecutive month in January, driven by a reduction in business uncertainty across all sectors except industry.
CNA/MCH/EPH/2026
ENDS, CYPRUS NEWS AGENCY
