New orders in Ghana stabilise in October
Output continued to fall at the start of the fourth quarter, albeit at a reduced pace, while new orders were broadly unchanged.
Companies increased their staffing levels and purchasing activity modestly.
Inflationary pressures continued to build.
Overall input prices increased at the sharpest pace in 19 months amid a steep and accelerated rise in purchase costs.
The passing on of higher input prices to customers led to a marked pace of output charge inflation, which quickened to a ten-month high.
The headline seasonally adjusted PMI posted 50.2 in October, thereby signalling a fractional monthly improvement in the health of the Ghanaian private sector.
This followed a reading of 49.2 in September when the PMI dropped below the 50.0 no-change mark for the first time in 32 months.
Business activity continued to fall in October, the second successive month in which a decline has been recorded.
The pace of redcution was slight and weaker than seen in September.
Where output decreased, panellists indicated that this was due to a lack of new orders.
After having fallen in the previous month, new orders were broadly unchanged during October amid some signs of improving customer demand.
Backlogs of work increased for the fourth month running as capacity pressures remained despite recent demand weakness.
Companies responded by increasing their staffing levels again, extending the current sequence of job creation to 26 months.
A rise in purchasing activity was also recorded, with stocks of inputs continuing to accumulate as firms built inventories in order to support activity.
Meanwhile, suppliers' delivery times improved modestly, with anecdotal evidence suggesting that they had sufficient stocks to satisfy demand for inputs.
The rate of overall input cost inflation quickened to a 19-month high in October, largely due to a sharp rise in purchase prices.
Costs for purchased items increased at the fastest pace since March 2017, with respondents mainly linking higher prices to currency weakness.
Meanwhile, staff costs were up modestly over the month, and to a much lesser extent than purchase prices.
Reflective of higher cost burdens, companies in Ghana raised their output prices.
Moreover, the rate of inflation was marked, having accelerated for the third month in a row to the fastest in the year-to-date.
Business confidence eased for the sixth consecutive month in October and was the lowest since November 2016.
That said, companies remained generally optimistic that output will increase over the coming 12 months amid hopes that economic conditions will improve. ■