The financial climate has improved to the improved consumer climate as well as improvements in the field of construction, according to a study by the University of Cyprus Economic Research Centre (ERC) which compiles the index. The Economic Sentiment Indicator (ESI) for February recorded an increase of 1.4 units compared to January 2014. "The improvement of the ESI among consumers comes from the fewer negative evaluations on the economic situation of households and of Cyprus in general in the next year, as well as from their improved expectations regarding the issue of unemployment," the ERC said.

Also there was an improvement in the trust indicator recorded in February, especially among consumers which seems to coincide with a "series of good news in relation to the Cyprus economy, such as the positive evaluation of the Troika for the implementation of the Economic Adjustment Programme". ERC also mentioned the fact that the crisis in 2013 was "better" than expected and the fact that the banking sector is showing slow recovery with some of the capital restrictions removed that lead to better carrying out of transactions.

Experts said that Cyprus still needs to wait and see the extent to which consumer confidence and business confidence will hold especially in the construction sector to see whether the feel good factor is only temporary.  The improvement in evaluations in the construction sector in February continues, stated ERC "with businesses indicating that they expect that there will not be an increase in job losses in relation to the next three months". The report added that the climate in the services sector noted a marginal increase due to positive evaluations of the financial situation of businesses and their demand in the last three months. It also indicated that the business climate in the retail sector and manufacturing did not present any changes compared to the previous month.

Source: InCyprus