This is not surprising if one takes into
account the fact that manufacturing,
along with tourism, has been one of
the main drivers of 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 rather
traditional production processes.
This chapter provides an overview of the
performance, growth and contribution
of the sector to the economy of Cyprus,
highlighting its importance on GDP, trade
and job creation.
Key products
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 added value of the industrial sector,
the biggest export segment within
manufacturing is pharmaceutical products
(34,6%). This is followed by food products
(32,2%) and non-metallic mineral products
(9%)8.
Performance
In 2008, GDP from manufacturing
reached an all-time high of 260,53 EUR
million, however, the industry was hit
hard by the 2013 economic recession,
reaching its lowest point that year, with
155,32 EUR million. 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 EUR million9
and contributes
approximately 5% to the country’s GDP10,
with a production value of 2.734,4 EUR
million (6,4% increase compared to 2015
figures)11. Despite this, Cyprus scores 69th
out of the 137 countries on the Global
Competitiveness Index 2017–201812 when it
comes to its growth prospects, highlighting
the need to focus on potential new
opportunities.
Cyrus is the third largest island in the Mediterranean Sea after Sicily and Sardinia. Ancient Cyprus was a notable copper producer with mines being exploited as early as the 2500 BC. Today copper, asbestos, iron pyrites, and gypsum have contributed significantly to the external trade. Here are the most important industries in Cyprus.
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Industry And Manufacturing
The nation’s industrial and manufacturing sector has in recent years witnessed a gradual decline as the services sector continues rising. Manufacturing accounted for about 6.5% of the country’s GDP in 2013. The sector also employed 9% of the nation’s labor force in the same year. The country is ranked at position 39 out of a total of 185 countries in terms of ease of doing business by the World Bank. The ranking takes into account the conducive and the regulatory environment in the opening and operating of local firms. Some of the main products manufactured in the country include textiles, food, and beverages, pharmaceuticals, machinery, and equipment.
Mining
The mining sector makes a relatively small contribution to the nation’s economy. In 2012 the sector employed an estimated 534 people. The mining industry which includes copper, gold, iron pyrite and asbestos was at one point very profitable. The sector, however, began its decline in the 1970s as a result of some external factors that included the Turkish invasion of the northern regions of the island in 1974 which had some important mines.
Agricultural
The agricultural sector together with forestry and fisheries accounted for about 2% of the country’s GDP in 2010. The sector has witnessed a considerable decline due to the steady development of other sectors of the economy. The sector, however, is still crucial as it employed an estimated 4.3 % of the nation’s labor force in 2010. Agriculture takes up about 13.5% of the country’s land according to estimates from 2009.
Tourism
The tourism industry has played an important role in the economy of Cyprus since independence. The country is currently among the biggest tourist attractions in the Mediterranean region. In 2011 the sector generated $3.6 million and provided jobs to about 74,000 of the country’s citizens. According to the World Travel and Tourism Council, the nation is ranked at position 35 out of 181 countries regarding tourism industry’s contribution to the overall economy. The sector accounted for 17.7% of the nation’s economy in 2011 compared to the world average which is 14%.
Banking And Financial Services
The banking and financial sector is quite large and sophisticated. It consists of companies carrying out commercial banking, cooperative credit, accounting and tax, capital markets, and insurance. The asset in the industry represented about 69% of the country’s GDP in 2009.
NAMRATA
