A manufacturing hub in the making
Cyprus scores 69th out of the 137 countries on the Global Competitiveness Index 2017-2018 when it comes to its growth prospects.
Cyprus aspires to promote industrial production in order for it to reach 15 per cent of GDP by 2030, from 7.9 per cent in 2017
Making full use of its strategic position at the crossroads of Europe, Asia and Africa, Cyprus, has always relied on trade for the development of its economy, facilitating the access of the island's main industrial products (pharmaceuticals, food and beverages, clothes, minerals, machinery and equipment) to international markets.
In Cyprus, there are 5,300 manufacturers, the majority of which are small and medium-sized, mostly family-owned. Most manufacturing companies have less than ten employees and only seven are large, i.e. employ more than 249 people, according to a recent Deloitte study.
Following the global technological trends, there have been efforts at the national level to modernise the country's traditional industry base, with a goal to support the shift towards higher value-added industry segments and products.
This is not surprising if one takes into account the fact that manufacturing, along with tourism, has been one of the main drivers of the development of the Cypriot economy in the last four decades.
Nonetheless, during the last few years, and especially after the major financial downturn of 2013, the manufacturing industry has been facing competitiveness problems, mainly due to its low volume of manufacturing exports and its traditional production processes.
The main growth areas in manufacturing in Cyprus, have been in the ICT sector, manufacturing parts, instruments and electronics, as well as consumer products such as cosmetics. Some of the most established export industries are those of the production of pharmaceuticals, cement and fabricated metal items.
Findings from the latest published Industrial Statistics of Cyprus reveal that, while the manufacturing of food products is the activity with the highest contribution of the added value of the industrial sector, the biggest export segment within manufacturing is pharmaceutical products (34.6 per cent). This is followed by food products (32.2 per cent) and non-metallic mineral products (nine per cent).
In 2008, GDP from manufacturing reached an all-time high of 260.53 million euro, however, the industry was hit hard by the 2013 economic recession, reaching its lowest point that year, with 155.32 million euro.
Since then, GDP from manufacturing has been following an upward trajectory. According to the latest figures of the Statistical Service of the Republic of Cyprus, the sector accounts for 209.09 million euro and contributes approximately five per cent to the country's GDP, with a production value of 2,734.4 million euro (6.4 per cent increase compared to 2015 figures). Despite this, Cyprus scores 69th out of the 137 countries on the Global Competitiveness Index 2017-2018 when it comes to its growth prospects, highlighting the need to focus on potential new opportunities.
Lowest unemployment in a decade
Unemployment figures are at the lowest level since February 2010, Cyprus' statistical service announced recently. Based on the seasonally adjusted data that show the trend of unemployment, the number of registered unemployed for November 2019 decreased to 20,860 persons in comparison to 21,233 in the previous month. The highest number for November in recent years was recorded in 2013, when the number after seasonal adjustment was 48,381.