Ghana’s Private Sector Growth Slows in April
Ghana’s private sector growth slowed in April, according to the Purchasing Manager Index (PMI) report released by S&P Global on Wednesday.
The report indicates new orders continued to rise in Ghana’s private sector in April, but the rate of expansion slowed, and business activity fell amid renewed increases in input costs and output prices.
Nonetheless, companies continued to expand their staffing levels and purchasing activity, while remaining confident of increases in output over the coming year.
The S&P Global Ghana Purchasing Managers’ Index posted 50.3 in April, down from 51.4 in March but remaining above the 50.0 no-change mark for the second successive month.
The PMI signalled a marginal monthly improvement in business conditions across the private sector.
The report said new orders continued to rise in April as stable economic conditions and improving customer demand helped firms to secure new business.
Growth was recorded for the third month running, but the rate of expansion eased to only a modest level. Some firms reported that their ability to secure new business had been affected by delays in payments to cocoa farmers.
“While new orders increased at a slower pace at the start of the second quarter, there was a renewed fall in business activity.
Output decreased for the third time in the past four months, albeit only marginally. Some respondents indicated that rising prices had been behind the reduction in activity.
Overall input costs increased for the first time in six months amid rises in both purchase prices and staff costs. The upturn in purchase prices was also the first since last October, and most marked for a year. Increased purchase costs often reflected higher fuel prices, but there were also reports of greater costs for imported items.
Meanwhile, the latest increase in staff costs was solid, but slightly weaker than that seen in March. Panellists indicated that the hiring of additional staff had added to their wage bills.
Employment was up for the fifteenth consecutive month in April, with firms linking the latest increase in staffing levels to higher new orders and the filling of vacant positions.
With input costs rising, companies increased their own selling prices fractionally, thereby ending an 11-month sequence of reduction. As well as taking on extra staff in April, firms also expanded their purchasing activity, the second month running in which this has been the case.
According to respondents, the modest rise in input buying reflected both improving customer demand and advanced purchases to try to mitigate expected price and supply issues in the months ahead.
Likewise, stocks of purchases also increased, extending the current sequence of accumulation which began in October 2024.
Companies were helped in their efforts to secure inputs by a further improvement in vendor performance. Suppliers’ delivery times shortened to a solid degree, albeit one that was the least marked for a year.
Hopes that improvements in economic conditions will help to support rises in new orders supported confidence in the 12-month outlook for business activity in April.
Sentiment ticked up from the previous month and was strongly positive. In some cases, optimism was based on hopes that prices would remain stable”.
Commenting, Andrew Harker, Economics Director at S&P Global Market Intelligence: “The latest S&P Global Ghana PMI data painted a mixed picture of business conditions at the start of the second quarter of the year.
“On the plus side, new orders continued to rise, feeding through to sustained increases in employment and purchasing activity.
“Inflationary pressures, meanwhile, remained relatively muted, but we did see the first rise in firms’ input costs for six months, in turn feeding through to nascent upwards pressure on selling prices.
“These emerging price pressures acted to limit business activity. “The extent to which price pressures build over the coming months will likely be key to the fortunes of the economy over the second quarter and beyond.” Nigeria’s US Dollar Bonds Yield Ease on Offshore Positioning
