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Ghana PMI October 2020

Ghana: Operating conditions improve for third month running in October

Private-sector business conditions continued to improve at the start of the final quarter of the year, with the IHS Markit Ghana Purchasing Managers’ Index (PMI) ticking up to a nearly two-and-a-half-year high of 53.1 in October from 51.4 in September. Consequently, the headline print moved further above the neutral 50-threshold that separates improving from deteriorating conditions compared to the prior month.

October’s notable uptick was driven by marked increases in output and new orders as well as a near-record steep rise in backlogs of work. Efforts to curb the spread of the pandemic have benefitted the private sector as customer demand picked up at the strongest pace since June 2018. However, job growth slowed.

Looking at prices, input costs rose strongly due to material shortages and currency weakness leading to more expensive imports. This was partly passed on to customers as output prices rose at the quickest pace since May 2019. Lastly, business confidence regarding the next 12-month period improved slightly compared to the prior month.

Andrew Harker, economics director at IHS Markit, commented: “The Ghanaian private sector is reaping the rewards of the COVID-19 pandemic being brought under control and was able to generate strong growth in October, according to latest PMI data. Sustaining the recovery into the future, however, depends on continued success in limiting the spread of the virus.”

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