Ghana: PMI records worst reading in a year in July
The IHS Markit Purchasing Managers’ Index (PMI) came in at 49.7 in July, down from June’s 51.0, marking the lowest reading in a year. As such, the index dropped below the 50-threshold, signaling a slight deterioration in business conditions from the previous month.
June’s slowdown was due to a broad-based deterioration, with growth in new orders and output waning amid rising price pressures. Meanwhile, the growth of output prices quickened at the fastest pace in nearly seven years on the back of a sharp increase of purchasing prices due to higher costs for raw materials linked to supply shortages and higher fuel costs. Lastly, firms’ optimism over the outlook for the coming 12-month period rose to a four month-high due to improving expectations of better business activity as pandemic-related disarray subsides.
Regarding July’s result, Andrew Harker, Economics Director at IHS Markit, remarked:
“The July Ghana PMI signalled a pause in growth in the private sector as inflationary pressures put the brakes on the economic recovery. Costs of a range of different inputs increased, leading to the fastest rise in selling prices for almost seven years. Customers were often reluctant to commit to orders given the hike in charges. Firms will be hoping that the pause in July proves to be only a blip and that growth can resume as the third quarter progresses. Prospects in this regard appear good, with business confidence improving sharply over the month.”