Ghana’s private-sector activity was broadly unchanged in November, even as firms benefited from easing cost pressures and stronger demand, according to the Purchasing Managers’ Index (PMI) survey from S&P Global released on Wednesday.
Headline PMI registered at 50.1, down slightly from 50.3 in October but still just above the 50.0 threshold that separates expansion from contraction.
The soft reading came against a backdrop of sustained disinflation across the wider economy.
Ghana’s headline inflation has been on a downward trajectory since January, falling to a near seven-year low of 6.3% in November.
Officials say the decline was broad-based, with both food and non-food inflation easing as the cedi stabilises and supply conditions improve.
This environment of cooling price pressures filtered into the PMI survey.
Overall input costs fell for the first time in three months, driven primarily by a slight decrease in purchase prices. Firms continued to reduce selling charges for the seventh consecutive month—the sharpest decline in three months—as price stability enabled businesses to compete more aggressively for orders.
New business rise but output fails to gain momentum
Demand remained supportive, with new business increasing for the tenth straight month, though the pace of expansion slowed. Several firms reported higher order volumes on the back of more stable prices. But others indicated that subdued underlying demand meant activity stalled. Output was essentially flat following only a marginal expansion in October.
A marked shortening of vendor lead times, despite higher purchasing activity, signalled spare capacity across supply chains—another indicator that business activity failed to accelerate.
Hiring strengthens as firms build capacity
Despite the stagnation in output, employment continued to improve. Companies expanded their workforce at a solid pace, extending the current hiring streak to ten months. Additional staffing helped firms reduce outstanding workloads, with backlogs falling for a third consecutive month and at the fastest rate since August.
Purchasing activity also rose at a stronger pace, supported by expectations of further improvements in demand. Inventories increased for the fourteenth straight month as firms sought to position themselves for future growth.
Commenting on the survey, Andrew Harker, Economics Director at S&P Global Market Intelligence, said “The recent period of relative price stability continued into November, and was the main factor helping firms to secure greater volumes of new orders again during the month. In turn, employment and purchasing activity also increased.”
Business confidence softens but remains resilient
Although sentiment slipped to a seven-month low, firms remained strongly optimistic about the year ahead. S&P Global said the combination of easing cost pressures and the Bank of Ghana’s recent interest-rate cut should support private-sector expansion in the coming months.
“Companies are yet to see the full benefit of muted price pressures on business activity, but with the Bank of Ghana cutting interest rates again in November, we will hopefully start to see some meaningful expansion of private sector output in the near future,” Harker noted.
