Ghana’s private sector activity eases as employment softens

Ghana Headline PMI eased to 54.5 in April, from 55.2 in March as employment softened despite growth in output. The Ghanaian private sector began the second quarter of 2018 on a healthy note. Output expanded at an accelerated pace, while new order receipts continued to grow strongly. Sustained strength in demand contributed to the sharpest rise in outstanding business since the survey’s inception, encouraging firms to hire new staff to manage the increased workload, albeit at a slower rate than that seen in March. However, despite increased operating costs, output charges were left unchanged in April.

“After rising to a six-month high of 55.2 in March, the Stanbic Bank Ghana PMI eased slightly to 54.5 as growth in employment softened despite continued growth in output. While many businesses received a strong level of new orders, the rate of growth slowed slightly in April as business activity normalized to more sustainable levels. Interestingly, the output price index showed that the disinflation process already underway in Ghana should continue as food inflation and exchange rate volatility remains benign. We still expect USD/GHS to trade within the forward curve throughout this year, rising gently to a maximum of 4.75 by year end. Our modest depreciation bias comes from a more constructive view of Ghana’s twin deficits. The trade balance should receive a boost from increased cocoa exports. Since the beginning of the year, cocoa prices have risen by over 40% which should underpin the performance of the agriculture sector.” Ayomide Mejabi, Economist at Stanbic Bank