Ghana: PMI hits highest reading since February in July, but remains below the 50-threshold
August 3, 2022
The S&P Purchasing Managers’ Index (PMI) rose to 48.8 in July from June's 48.5. July's result marked the best reading since February. Consequently, the index moved closer to the 50.0 no-change threshold, signaling a softer deterioration in business conditions compared to the previous month. That said, it represented the sixth consecutive monthly deterioration in business conditions.
July’s softer decline was caused by less significant reductions in output and new orders. While demand remained weak, some firms highlighted abating price pressures as driving the moderation in output. Turning to prices, input costs continued to increase amid higher fuel and raw material prices and unfavorable FX movements, but the rate of growth softened to a five-month low. Consequently, selling prices also grew at a reduced pace. Moreover, companies reduced staffing levels for the first time in ten months. More positively, business sentiment remained optimistic, as firms expected a global recovery in demand over the next twelve months.
Shreeya Patel, economist at S&P Global Market Intelligence, said:
“Latest data indicated another decline in Ghanaian private sector activity […]. However, there were signs that demand conditions were on the verge of recovery with new orders falling only slightly during the month […]. Though, the lull in the global macroeconomic environment has made matters even more difficult and threatens short-and medium-term performance.”