The producer inflation for the Manufacturing sub-sector, which constitutes more than two-thirds of total industry, increased by 4.5 percentage points to 57.4 percent (year-on-year) in July 2022.

Manufacturing sub-sector was the major driver of producer price inflation in July which rose by 2.5 percentage points to 41.2 percent, up from 38.7 percent recorded in June. The sub-sector also recorded the highest month-on-month inflation rate within the industry sector in July with a rate of 3.1 percent.

The July Producer Price Index (PPI) Newsletter released by the Ghana Statistical Service (GSS), revealed that in July 2022, one out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 57.4 percent.

This group was the Manufacture of coke, refined petroleum products and nuclear fuel which recorded the highest inflation rate of 146.5 percent. Manufacture of food products and beverages witnessed the second highest inflation rate of 56.1 percent, followed by Manufacture of other non-metallic mineral products (37.0%) and Manufacture of chemicals and chemical products (36.8%).

The Publishing, printing and reproduction of recorded media experienced the least inflation rate of 2.6 percent within the manufacturing sub-sector.

Developments in Mining & Quarrying and Utilities Sub-sectors

The Ghana Statistical Service (GSS) provided information on inflation rates for all industry and its three major sub-sectors for the last twelve months. The major sub-sectors include Mining and Quarrying, Manufacturing and Utilities.

Recent data from the GSS show that the utility sub-sector recorded a year-on-year inflation rate of 1.3 percent in July 2022 and a monthly inflation rate of 0.1 percent.

The producer price inflation in the Mining and Quarrying sub-sector decreased by 1.6 percentage points over the June 2022 rate of 25.5 percent to 23.9 percent in July 2022. This reflected in the decline in month-on-month inflation rate which was -1.3 percent in July.

The current rate of 41.2 percent in July 2022, is an indication of the increase in ex-factory prices of goods and services between July 2021 and July 2022 (year-on-year). The month-on-month change in the producer price index between June 2022 and July 2022 was 1.9 percent.

Petroleum Price Index

The producer inflation rate in the petroleum subsector was 25.2 percent in July 2021. Thereafter, it increased continuously to 58.4 percent in November 2021 but dropped to 36.0 percent in January 2022. Between February and July 2022, the rate increased consistently from 44.3 percent to 146.5 percent.

A track of the producer inflation rate show that in July 2021, the producer price inflation rate for all industry was 8.4 percent. The rate decreased to 8.1 percent in August 2021, but increased to 8.8 percent in September 2021. Subsequently, the rate resumed an upward trend and increase consistently to 41.2 percent in July 2022.

Ghana Private Sector Activity Shrinks for the 6th consecutive month

The developments within the industry sector continue to play a significant role in the country’s Purchasing Managers’ Index (PMI). In July 2022, the S&P Global Ghana PMI rose to 48.8, from 48.5 in June, pointing to the sixth consecutive month of falling private sector activity.

New orders and output continued to fall and sustained declines in activity and subsequent reductions in backlogs led firms to cut their headcounts for the first time in 11 months. On the price front, input costs continued to increase sharply amid higher fuel and raw material prices, but the rate of growth was the lowest since February. Selling prices also rose at a softer pace.

S&P Global disclosed that firms maintained an optimistic view towards output amid hopes that global economic conditions would improve.