Ghana’s private sector slashed selling prices at the second-fastest pace on record in July, capitalizing on a historic drop in purchase costs driven by the cedi’s sharp appreciation.
The S&P Global Ghana Purchasing Managers’ Index (PMI) edged down to 50.2 from June’s 51.3, signaling near-stagnation and the weakest improvement in six months.
Paradoxically, business optimism surged to its highest since February 2017, with 83% of firms forecasting output growth amid stable exchange rate expectations.
New orders expanded marginally for the sixth consecutive month, aided by price reductions, but growth slowed notably. Output declined slightly, ending a five-month expansion streak, as firms cited client liquidity constraints and softening demand.
Employment rose solidly, though job creation eased from May’s peak, while backlogs of work shrank at the fastest rate since June 2024. Staff costs climbed further, with companies raising wages to motivate workers, offsetting some benefits of falling input expenses.
Andrew Harker, Economics Director at S&P Global Market Intelligence, linked the trend to currency gains: “Output’s dip may prove temporary if prices stabilize. Record confidence bodes well, but cooling orders warrant vigilance.”
The Bank of Ghana’s July interest rate cut aligns with the PMI’s deflationary signals, though demand resilience remains untested.
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