Ghana: Private-sector conditions worsen marginally in June
July 3, 2020
Business conditions in Ghana’s private sector nearly stabilized at the end of the second quarter, with the IHS Markit Purchasing Managers’ Index (PMI) coming in at 49.7 in June from 46.7 in May. While the print marked a four-month high, it remained just shy of the neutral 50-threshold that separates an overall decrease compared to the previous month from an expansion.
The uptick in the headline came amid the first rise in new orders since February, as measures to curb the spread of Covid-19 were eased. Less positively, output continued to fall, albeit only slightly; backlogs of work decreased due to spare capacity; and jobs were shed for the fourth consecutive month. Moreover, while demand dynamics improved due to the gradual reopening of the economy, purchasing activity remained constrained due to caution as the outlook is still uncertain.
Turning to prices, input costs rose for the first time in four months due to a shortage of raw materials as border closures weighed on import ability. Consequently, output prices rose although some companies offered discounts in a bid to attract customers. Lastly, business sentiment ticked up slightly from the 18-month low recorded in May.
Andres Harker, economics director at IHS Markit, commented:
“The economy looks to be getting back on its feet, raising hopes that the third quarter will see a recovery in private sector activity. That said, the severity of the COVID-19 downturn has been such that it will take a sustained period of solid growth to recover fully.”
Author: Jan Lammersen, Economist