Ghana PMI April 2018


Ghana: PMI increases in May

June 5, 2018

The Stanbic IBTC Bank Ghana Purchasing Managers’ Index (PMI) surged to 55.8 points in May, up from 54.5 points in April. May’s print marked the highest reading in eight months and pointed to a more robust improvement in operating conditions in the month, with the index moving further above the 50-point threshold that separates improvement from deterioration in private sector business conditions.

The notable jump in the PMI came on the back of impressive output growth, which expanded at a survey-high in May. The acceleration in output growth came against a backdrop of expanded operations and higher new orders, which were in turn reflective of strengthening customer demand. Employment rose at the highest rate in the survey’s history in May, as businesses expanded new hiring in response to robust new order growth. Despite the increase in employment, backlogs of work continued accumulating in May, increasing for the fourth time this year.

Amid booming client demand, firms increased their purchasing activity in May, in turn fueling input cost increases. Among the key reasons behind the price surge in May was the cedi’s weakness against the U.S. dollar in the period. Partly reflecting higher input costs, output prices increased marginally in May, following sluggishness observed in the previous month.

Commenting on the report, Ayomide Mejabi, Economist at Stanbic Bank, noted:

“There are minimal risks to our core view that Ghana’s economy should experience strong growth over the next few years. […] In the immediate, the depreciation of the USD/GHS may dampen business and consumer sentiment. However, we view the pressure on the currency as transient, reflecting the global risk-off sentiment towards emerging and frontier markets, rather than any domestic concern.”

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 8.5% in 2018, which is up 0.8 percentage points from last month’s estimate, and 8.0% in 2019.

Author:, Research Team Manager

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