Ghana: PMI records worst reading in over a year in August
The IHS Markit Purchasing Managers’ Index (PMI) came in at 49.7 in July, down from June’s 51.0 and marking the worst reading in over a year. As such, the index dropped below the 50-threshold, signaling a deterioration in business conditions from the previous month.
August’s downturn came as stricter pandemic-related restrictions, unfavorable weather conditions and, notably, rising price pressures all had a detrimental impact on new orders and output. This led businesses to lower their headcount for the second consecutive month. Meanwhile, higher input prices due to lack of materials, higher costs for transport and a weak currency led firms to raise output charges. That said, optimism over the outlook for the coming 12-month period held steady as expectations of improving demand gave reason for hope.
Commenting on July’s result, Andrew Harker, Economics Director at IHS Markit, noted:
“The PMI data show that the Ghanaian private sector is going through a soft-patch at present as demand is restricted by inflationary pressures in the economy. There are some reasons to believe, however, that growth can resume soon. Companies remained confident that their output will rise over the coming year, and some were even sufficiently encouraged to expand their inventory holdings in order to prepare for coming improvements in demand.”