The Ghanaian private sector began the second quarter of 2018 on a healthy note.
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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.
The headline figure derived from the survey is the Purchasing Managers’ Index (PMI).
Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The PMI fell to 54.5 in April, from 55.2 in March, indicating a solid, albeit slightly weaker, pace of improvement in private sector business conditions in Ghana.
Businesses continued to secure new sales during April, sustaining a trend which first began in February 2016.
The strong rate of growth in new orders was supported by successful marketing initiatives and new product launches.
Robust demand conditions exerted pressure on capacities across the Ghanaian private sector, with backlogs of work increasing at the sharpest pace since data collection began in January 2014.
In response, firms expanded output to a sharp degree in April.
The rate of growth in activity accelerated for a third successive survey period and was the fastest since August 2017.
To cope with greater output requirements, Ghanaian private sector firms recruited additional staff in April.
Although job creation was solid overall, it eased on that seen in March to a three-month low.
To accommodate for the rise in workloads, another sharp rise in purchasing activity was recorded in April.
Despite strong input demand, suppliers were able to deliver at a faster pace.
Panellists mentioned that competition among vendors had contributed to quicker lead times.
In turn, pre-production inventories were increased, albeit at the slowest rate since January.
Prices paid for inputs by Ghanaian companies increased during April.
Higher costs were attributed to greater raw material prices and unfavourable exchange rate movements.
That said, the rate of inflation eased to an all-time survey low.
Despite higher cost burdens, output prices were left unchanged in April, thereby ending a nine-month sequence of rising selling charges.
While some panellists passed on part of the rise in costs, others discounted prices to attract new clients. ■