Ghana: PMI rises in May but remains in contractionary territory
Business conditions in Ghana’s private sector deteriorated in May, albeit at a softer pace compared to April. The IHS Markit Ghana Purchasing Managers’ Index (PMI) rose to 46.7 from April’s all-time low of 31.7. Consequently, the headline figure remained south of the neutral 50-threshold that signals an overall decrease compared to the prior month.
The uptick in May was driven by softer falls in output and new orders as lockdown measures were gradually lifted. However, employment dropped markedly due to weakened demand, with customers reluctant to spend over worries around the pandemic. Turning to prices, input costs were unchanged as materials shortages were offset by lower demand for inputs. On the other hand, output prices rose marginally. Lastly, business confidence rebounded and reached its highest level since November 2018.
Andrew Harker, economics director at IHS Markit, commented: “The data raise hopes that a return to growth in the economy may even be seen in June, while companies themselves are at their most optimistic for a year-and-a-half.”