Ghana’s private sector activity falls for first time in 3 months

Investing.com -- Ghana’s private sector activity decreased for the first time in three months in September, according to the latest S&P Global Ghana Purchasing Managers’ Index (PMI).

The PMI fell to 49.8 in September from 50.8 in August, indicating a marginal deterioration in business conditions and ending a seven-month growth streak.

Business output declined for the third consecutive month, with survey respondents citing difficulties in sourcing materials and recent exchange rate fluctuations as key factors behind the reduction.

Despite the overall decline, new orders continued to rise for the eighth straight month, though at a slower pace than in August. Companies attributed this growth to lower selling prices and client recommendations.

Output prices decreased for the fifth consecutive month in September, albeit marginally and at the slowest rate in this sequence. This reduction reflected a recent period of falling input costs, which came to an end in September as overall input prices increased for the first time since April.

Purchase prices and staff costs both rose at the end of the third quarter. While the appreciation of the cedi against the US dollar earlier in the year helped limit purchase price inflation, some firms reported higher costs for purchased items as the currency gave back some ground during the month.

Employment increased for the eighth consecutive month as companies needed more workers to handle new order inflows. The job creation rate remained solid, though it was the slowest since April.

Companies also increased their purchasing activity, with input buying expanding for eight successive months. Supplier performance improved markedly amid strong competition among vendors, with lead times shortening to the greatest extent since May.

Business confidence remained strong in September, with 83% of firms predicting an expansion of activity over the coming year. This optimism strengthened from August, supported by predictions of rising new orders and hopes that exchange rates and price levels would remain conducive to growth.

Andrew Harker, Economics Director at S&P Global Market Intelligence, noted that companies in Ghana "again struggled to translate new order growth into increases in business activity," but highlighted positive elements including sustained new order growth, increased employment and purchasing activity, and elevated business confidence.

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