The nascent recovery in Ghana’s private sector gained momentum at the end of 2018, with business conditions improving to the greatest extent since June.

This reflected solid increases in both output and new orders amid reports of improving client demand. Meanwhile, there was a marked softening of inflationary pressures, with both input costs and output prices rising at much weaker rates than seen in November.

A release copied to, on 4th January, 2019, indicated that, the headline seasonally adjusted PMI rose to 52.3 in December from 50.5 in November, signalling a solid monthly improvement in the health of the sector and one that was the most marked in six months.

In line with the headline figure, new orders increased for the third successive month in December. Moreover, the rate of growth was marked and the fastest since June.

A number of panellists reported signs of improving demand in the private sector.
The strengthening demand picture fed through to a sharper rise in business activity, which increased for the second successive month following a two-month period of contraction in September and October.

There were signs that the pick-up in new order growth tested the capacity of companies in December as backlogs of work rose at the joint-fastest pace in the survey history.

Despite stronger increases in workloads, the rate of job creation remained muted, quickening only marginally from November’s two-year low. There were some reports of a lack PMI of funds to support hiring.

Rates of input cost and selling price inflation eased markedly in the final month of 2018. Overall input costs continued to rise sharply, but at the slowest pace since May as purchase price inflation was much weaker than that seen in November.

Where purchase prices rose, panellists linked this to a range of factors including higher fuel costs, currency weakness and import duties. Staff costs, meanwhile, increased at a modest pace that was little-changed from the previous month.

Output prices continued to be raised in response to higher cost burdens. The rate of inflation slowed sharply, however, amid reports from panellists that discounts had been offered to attract customers in a competitive environment.

Purchasing activity rose at a sharp and accelerated pace during December in response to improving new orders.

Stocks of purchases also rose markedly, with some respondents mentioning positive expectations regarding future demand prospects.

Overall business confidence remained strong at the end of the year, with sentiment broadly in line with the series average. Surveyed companies indicated that a more stable economy would be likely to support growth of new business and thereby output over the coming year.


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