Ghana: PMI ticks down in October
The IHS Markit Purchasing Managers’ Index (PMI) came in at 51.0 in October, down from the previous month’s 52.6 which had marked the strongest reading since October 2020. Nevertheless, the index remained above the 50-threshold, signaling an improvement in business conditions from the previous month.
October’s lower reading came despite a sharp drop in the number of new Covid-19 infections in the month and was mainly driven by a softer rise in output amid supply-related difficulties. That said, firms increased their headcount at the swiftest rate in five months.
Moreover, input price inflation rose sharply due to higher fuel and transportation costs, as well as a weaker Cedi, prompting businesses to raise output charges again. Nonetheless, optimism over the outlook for the coming 12-month period improved as expectations of increased new orders and easing pandemic-related disruptions rose.
Commenting on this month’s result, Andrew Harker, Economics Director at IHS Markit, said:
“After returning to growth in September, Ghana’s private sector maintained expansion into October and should be set for a positive end to the year. While output was constrained to some extent by difficulties sourcing materials, firms were able to compensate by expanding capacity through hiring workers and purchasing more inputs. Inflationary pressures remain a key headwind, however, with fuel and freight costs in particular a cause for concern.”