Ghana: PMI edges down in April
May 6, 2019
The Stanbic IBTC Bank Ghana Purchasing Managers’ Index (PMI) ticked down from 51.5 points in March to 51.2 in April. Nevertheless, the index remained above the critical 50-point threshold that separates improvement from deterioration in Ghanaian business conditions where it has been since October 2018.
Business activity lost some steam in April, and seemingly drove the overall deterioration, as new business growth failed to fully fed through to faster output growth. New orders accelerated from the previous month, albeit just slightly, amid signs of strengthening demand. Meanwhile, both staffing levels and backlogs of work continued to increase in the surveyed month. On the price front, inflationary pressures remained elevated in April, chiefly due to higher fuel costs and currency weakness. In turn, companies passed the burden of higher costs onto consumers through higher output prices. On a more positive note, business confidence rose in April, due to firms’ improved outlook over the foreign exchange rate environment.
Commenting on the report, Andrew Harker, an associate director at IHS Markit, noted:
“The general picture of a modestly improving economy that has been seen through the early part of 2019 was recorded again in April, and expectations for the future picked up […] Positive sentiment partly hinges on a stabilization of the cedi exchange rate, however, the weakness of which continued to lead to cost inflation in April.”
Ghana Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists expect fixed investment to expand 5.3% in 2019, which is unchanged from last month’s forecast. In 2020, fixed investment is seen rising 4.7%.
Author: Almanas Stanapedis, Economist