Property and tourism sectors boost Cyprus economic index

The Cyprus Composite Leading Economic Index (CCLEI) recorded a year-on-year increase of 2.9 per cent in January 2026, according to the most recently revised data published by the Economics Research Centre (CypERC) of the University of Cyprus.

The January reading followed year-on-year increases of 3.1 per cent in December 2025 and 3.2 per cent in November 2025.

Despite a mild slowdown in its annual growth rate compared with the previous two months, the index remained in positive territory, reflecting overall favourable developments in the majority of its components.

Positive year-on-year growth rates were recorded in temperature-adjusted electricity production, property sales contracts, tourist arrivals, and retail trade activity.

At the same time, the price of Brent crude oil in January registered a significant decrease compared with the corresponding month of the previous year, while the Economic Sentiment Indicator (ESI) in the euro area showed further improvement in January 2026.

In contrast, the ESI in Cyprus deteriorated on an annual basis, a development mainly linked to a decline in the business climate in the services sector and, to a lesser extent, in the industrial sector.

Overall, the positive year-on-year performance of the CCLEI in January indicates that the Cypriot economy continues to move along a stable growth trajectory, despite ongoing external uncertainties stemming from the international economic environment and geopolitical developments.

Further details on the methodology used in constructing the index are available on the CCLEI website.

The CCLEI is designed to provide early warning signals of turning points in business cycles, namely shifts in overall Cypriot economic activity.

It consists of a number of leading variables whose movements tend to precede changes in aggregate economic activity and which are assessed on a regular basis.

The leading variables have been selected from a broad pool of domestic and international indicators.

They include the Brent crude oil price in euros, the Economic Sentiment Indicator in Cyprus and the euro area, as well as total property sales contracts.

Other factors include the volume of tourist arrivals in Cyprus, the value of Cypriot credit card transactions, the retail trade sales turnover volume index, and the temperature-adjusted volume index of electricity production.

Meanwhile, the centre recently also published a summary of business and consumer surveys for January 2026, indicating a slight deterioration in economic sentiment in Cyprus.

In January 2026, the Economic Sentiment Indicator for Cyprus declined by 0.2 points compared with December 2025, primarily due to weaker business confidence in the construction sector and, to a lesser extent, in the retail trade and industrial sectors.

The Services Confidence Indicator increased further, reflecting improved assessments of both recent and expected turnover.

The decline in the Retail Trade Confidence Indicator was attributed to more negative views regarding current stock levels and downward revisions to sales expectations.

The Construction Confidence Indicator fell markedly as firms moderated their assessments of order books and expected employment, shifting from positive evaluations in previous months to more neutral positions in January.

Most construction firms described current order book levels as sufficient for the season and expected total employment to remain unchanged over the next three months, suggesting that the sector is operating close to full capacity, with labour shortages constraining further growth in building activity.

Weather conditions were also cited more frequently in January than in December as a factor limiting construction activity.

The Industry Confidence Indicator declined due to less favourable assessments of stock levels and downward revisions to production expectations.

The Consumer Confidence Indicator remained unchanged in January, maintaining the relatively high level reached in December, as consumers expressed greater optimism about their future financial situation but less optimism regarding the country’s economic outlook and weaker intentions to make major purchases in the near term.

Finally, the centre reported that the Economic Uncertainty Indicator for Cyprus decreased for the fourth consecutive month in January, driven by reduced business uncertainty across all sectors except industry.