Composite Leading Economic Index up 2.1% in June

Cyprus' Composite Leading Economic Index (CLEI) recorded an annual increase of 2.1% in June.

According to the University of Cyprus' Economics Research Centre (ERC), June’s increase followed the year-over-year increases of 1.8% and 1.7% recorded in May and April 2023, respectively (based on recent and revised data).

It is noted that the CCLEI is designed to provide early warning signals for the turning points of business cycles i.e., early evidence of the turns in economic activity and comprises of a number of leading economic activity variables whose changes tend to lead the changes in the overall economic activity and which are evaluated on a regular basis.

It is added that the leading variables selected from a large pool of domestic and international leading indicators are the Brent Crude oil price (€), the Economic Sentiment Indicator (ESI) in Cyprus and the euro area, the total number of property sales contracts, the tourist arrivals, the value of credit card transactions, the retail trade sales turnover volume index, and the volume index of electricity production.

According to the press release, the positive performance of most of the CCLEI’s domestic and international components is reflected in the overall positive year-over-year growth rate of the Index in June 2023.

Specifically, it is stated that most of the domestic components of the CCLEI, including total property sales contracts, tourist arrivals, credit card transactions, as well as retail sales volume, contributed to maintaining the positive year-over-year growth rate of the Index in June.

It is added that the year-over-year growth rate of the international Brent Crude oil price was negative also in the second quarter of 2023, while in contrast, the containment of the upward trend in CCLEI is largely due to the temperature-adjusted volume of electricity production, which decreased in June 2023 compared to June 2022.

It is further noted that the Economic Sentiment Indicator (ESI) in the euro area also significantly contributes to restraining the upward trend of the CCLEI, recording a negative year-over-year growth rate in June 2023, in contrast to the ESI in Cyprus, which indicated a year-over-year increase in June 2023.

In conclusion, the upward trend in the CCLEI is maintained in the second quarter of 2023 amid a volatile economic and geopolitical environment that prevails, especially at the international level, and is reflected in the ESI of the euro area, with most of the domestic and international components of the CCLEI contributing to its upward trend in June 2023, the press release concludes.