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Ghana’s private sector activity growth slows – IHS Markit

Private Sector Activity Growth Slows File Photo

Wed, 16 Feb 2022 Source: thepublisheronline.com

The IHS Markit Ghana Purchasing Managers Index (PMI) which gauges the rate of inventory accumulation by managers of private sector firms and measures dynamics in economic activity, decreased to 50.8 in January of 2022, from 51.8 in December 2021.

This is an indication of a slowdown in private sector activity but still signaling possible business conditions at the start of the year.

“New order growth remained solid, slowing only slightly from that seen in December as demand continued to improve. Employment and purchasing activity also rose further but output shrank for the first time in five months”.

The recent IHS Markit Ghana PMI showed that suppliers’ delivery times continued to improve amid competition among suppliers and clear requirements provided to vendors in terms of delivery needs.

In an earlier report, the Bank of Ghana disclosed that its latest confidence surveys conducted in December 2021 signaled mixed sentiments.

According to the BoG, consumer confidence reduced because of recent increases in ex-pump petroleum prices and the announcement of new tax measures in the 2022 budget, business sentiments, on the other hand, improved.

The improved business sentiments were driven by the achievement of short-term company targets and optimism about companies’ growth prospects.

Meanwhile, on the price front, IHS Markit warned that inflationary pressure remained elevated.

In the recent CPI data released by the Ghana Statistical Service (GSS), inflation rose to 13.9 percent in January 2022, from 12.6 percent in December 2021.

For the first time in seven months, non-food inflation on a year-on-year basis, surpassed food inflation and the main driver was Housing, Water, Electricity, Gas and Other Fuels subclass.

Inflation in the transport subclass was also high which may increase further as transport operators are calling for an increase in transport fares by 30 percent.

Source: thepublisheronline.com