Ghana: PMI reaches its lowest print since April 2020 in October
November 3, 2022
The IHS Markit Purchasing Managers’ Index (PMI) fell to 44.0 in October from September's 45.6. As a result, the index fell further below the 50.0 no-change threshold, signaling a sharper deterioration in private sector operating conditions compared to the previous month. October's result marked the weakest reading since April 2020 and represented the ninth consecutive monthly deterioration in business conditions.
October’s print confirmed the difficult business conditions in the country: Output and new orders both contracted at the quickest pace since April 2020. Soaring prices affected client demand, which, in turn, reduced companies’ output. Input inflation fell to a three-month low but remained substantial, driven up by unfavorable FX movements. This led to the second-fastest increase in output prices on record. Meanwhile, amid higher costs and lower new orders, companies’ workforces fell at the quickest rate since June 2020 and for the fourth month in a row. Finally, firms’ business sentiment reached its lowest level since March 2020.
Shreeya Patel, economist at S&P Global Market Intelligence, said:
“The Ghanaian economy has struggled over the last year or so and latest data suggests the troubling trading conditions are set to persist. Recent currency weakness has pushed the economy deeper into contraction territory, with businesses showing increased concern over the current environment. For now, firms will hope that the currency recovers, and price pressures subside."
Author: Jacques Le Chevallier , Junior Economist