Breaking news

Divergent Trends Define Cyprus Service And Transport Sectors In Q2 2025

Overview Of Mixed Sector Performance

The Cyprus turnover value index for services and transport in the second quarter of 2025 revealed a blend of robust growth and modest declines compared to the same period in 2024. According to data from the state statistical service (Cystat), key sectors exhibited varied performance profiles, reflecting both resilience and emerging challenges across the economy.

Substantial Gains In Accommodation And Food Services

Accommodation and food service activities led the upswing with an 11.7% increase, underpinned by a strong upswing in accommodation services at 13.9% and a 9.3% boost in food and beverage operations. This trend underscores the sector’s capacity to attract both local and international clientele, bolstering Cyprus’s tourism appeal.

Steady Momentum In Administrative And Support Services

Administrative and support service activities improved by 7.2% overall. Notably, the rental and leasing segment rose by 7.8%, while travel agency and tour operator services increased by 4.9%. Complementing these figures, security and investigation operations surged by 11.4%, and office administrative support grew by 9.6%, indicative of growing business operational needs and corporate confidence.

Emerging Trends In Digital And Information Services

The information and communication sector advanced by 4.4%, with publishing and programming and broadcasting growing by 5.2% and 3% respectively. Telecommunications and related IT services also reflected moderate gains, with computer programming and allied activities seeing a 3.4% increase, while information service activities surged by 17.3%, signaling robust digital transformation across the economy.

Professional And Technical Service Sectors

Professional, scientific and technical activities recorded a 3.6% rise. Within this domain, legal and accounting, management consulting, and advertising services experienced modest yet significant growth, while sectors such as architectural and engineering, and motion picture and sound recording saw slight declines of 3.1% and 3.3% respectively.

Transport And Storage: Mixed Performance

The transport and storage sector delivered a 2.1% gain overall. Land transport rose by 5.7%, with water transport increasing by 4% and air transport modestly rising by 0.7%. Support functions including warehousing and postal courier services also reflected positive momentum, though real estate activities experienced a contraction of 1.8% in turnover compared to the previous year.

H1 2025 Sectoral Outlook

Analyzing the first half of 2025, trends maintained a similar pattern with accommodation and food service activities up by 10.9%, administrative and support services by 8.2%, and information and communication at 6.3%. Professional services improved by 4.1% while transport activities continued their steady progression at 2.1%, even as real estate faced a cumulative decline of 3.4%. These figures highlight both the sectoral dynamism and the nuanced challenges that policymakers and business leaders must navigate in a rapidly evolving economic landscape.

Mercedes-Benz Posts Higher Profit Despite China Slowdown

Mercedes-Benz reported stronger-than-expected second-quarter results, lifting its shares on Tuesday despite mounting pressure from Chinese automakers and a weaker outlook for sales and revenue.

The earnings provided a boost for Europe’s auto sector, where manufacturers continue to grapple with tariffs, softer demand and intensifying competition from Chinese rivals. Volkswagen, Mercedes-Benz and BMW have all accelerated restructuring efforts in response.

Cost Discipline Lifts Quarterly Profit

Mercedes-Benz shares rose as much as 5.9% following the results before trimming gains to trade 3.5% higher by 1118 GMT. The company reaffirmed its profit margin guidance for its core passenger car business after reporting an adjusted return on sales of 4.0% for the second quarter, above market expectations and within its 3% to 5% target range.

“In an environment where some automakers are ringing alarm bells on their competitive positioning, Mercedes delivered a clear and confident message,” Morningstar analyst Rella Suskin said.

Second-quarter operating profit increased 22% to €1.5 billion ($1.7 billion), despite a 3% decline in revenue. Lower administrative and research and development costs, together with strong performances from the financial services and vans divisions, supported earnings, while the results also included a €131 million gain related to the planned sale of leasing subsidiary Athlon.

China Remains The Key Pressure Point

Despite stronger profitability, Mercedes continues to face a challenging market environment. Sales in China fell 30% during the second quarter, prompting the company to abandon earlier expectations for stable car sales and group revenue. It now expects both to decline slightly from a year earlier.

BMW also lowered its outlook in June following a deeper-than-expected slowdown in China, highlighting the pressure facing Germany’s premium carmakers. At the same time, Mercedes said Chinese manufacturers are increasingly expanding into European markets, although Chief Executive Ola Kaellenius said their focus remains on higher-volume segments rather than the premium market.

“But that is not a reason to sit back and be relaxed,” he said.

Manufacturing Shift Continues

Mercedes is also reshaping its manufacturing footprint. The company said its German factories will undergo a more aggressive push toward leaner production, although it declined to provide further details while talks with labour representatives continue. Production is also being expanded in lower-cost Eastern European locations, including Hungary, where the company is increasing capacity at its Kecskemet plant, as well as in Poland.

Chief Financial Officer Harald Wilhelm said the full-year margin for the passenger car division is expected to come in at the lower end of the company’s guidance range, reflecting a higher share of electric vehicle sales in Europe, which remain more expensive to produce and continue to weigh on profitability.

“We must continue to work flat out to reduce costs so that we can remain competitive on the prices of our products,” Kaellenius said.

eCredo
Aretilaw firm
The Future Forbes Realty Global Properties
Uol

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter