Companies in Ghana recorded broadly stable business conditions in the penultimate month of 2025, with new orders, employment and purchasing continuing to rise but output remaining broadly unchanged. There remained a lack of inflationary pressure across the private sector, with overall input costs falling for the first time in three months and companies continuing to reduce their output charges accordingly.
The S&P Global Ghana Purchasing Managers’ Index (PMI) posted 50.1 in November, down marginally from a reading of 50.3 in October but still fractionally above the 50.0 no change mark. The new orders, employment and inventories components of the headline PMI all pointed to improving business conditions, but a shortening of vendor lead times suggested spare capacity in supply chains and business activity stagnated.
The stable picture for output followed a marginal expansion in the previous month. While some firms increased their activity in line with higher new orders and a lack of upwards price pressures, others scaled back output amid subdued demand growth. The rate of expansion in new orders slowed in November and was only slight, though new business has now increased in each of the past ten months, with price stability reportedly helping firms to secure new orders.
Selling prices decreased for the seventh consecutive month in November. The latest fall was slight but the sharpest in three months. The reduction in charges coincided with a first drop in overall input costs for three months, although the fall was only fractional.
The decline in overall input prices was centred on purchase costs, which decreased slightly amid an improvement in the strength of the cedi against the United States dollar. On the other hand, staff costs continued to increase, extending the current sequence of inflation which began in August 2020. The latest rise was solid and sharper than that seen in the previous survey period.
Companies expanded their workforce numbers at a solid pace in November. Employment has now increased in each of the past ten months, with the latest solid rise reflecting the need for additional capacity and the filling of vacancies. Higher staffing levels helped firms to be able to keep on top of workloads, with outstanding business reduced again. The latest fall in backlogs of work was modest, but the most pronounced in three months.
As well as hiring additional staff, companies also increased their purchasing activity at a solid pace in November. Improving customer demand and the prospect of further increases in new orders in the months ahead encouraged firms to build inventories, which rose for the fourteenth consecutive month.
Despite higher demand for inputs, suppliers’ delivery times shortened markedly again amid competitive pressures. Qualitative feedback indicated that increased competition among vendors led to improved delivery times, suggesting spare capacity in supply chains that could support future growth if demand conditions strengthen.
Andrew Harker, Economics Director at S&P Global Market Intelligence, commented that the recent period of relative price stability continued into November, and was the main factor helping firms to secure greater volumes of new orders again during the month. In turn, employment and purchasing activity also increased.
Companies are yet to see the full benefit of muted price pressures on business activity, but with the Bank of Ghana cutting interest rates again in November, we will hopefully start to see some meaningful expansion of private sector output in the near future, Harker stated. The central bank reduced its policy rate by 350 basis points to 18 percent in November, marking another significant easing move as inflation continued to decline.
The PMI data is based on surveys of approximately 400 private sector companies carefully selected to accurately represent the true structure of the Ghanaian economy, including agriculture, construction, industry, services and wholesale and retail. The panel is stratified by gross domestic product and company workforce size, with survey responses reflecting the change, if any, in the current month compared to the previous month based on data collected mid month.
The PMI is a weighted average of five indices with the following components: New Orders at 30 percent, Output at 25 percent, Employment at 20 percent, Suppliers’ Delivery Times at 15 percent, and Stocks of Purchases at 10 percent, with the Suppliers’ Delivery Times component inverted so that it moves in a comparable direction to the other series.
The November PMI reading reflects a continuation of the relatively stable conditions that have characterized Ghana’s private sector in recent months. After experiencing a contraction in September when the PMI fell to 49.8, the sector returned to marginal growth in October with a reading of 50.3, before settling just above the neutral mark in November.
The sustained period of price stability, with selling prices declining for seven consecutive months, has provided a supportive environment for businesses to secure new orders despite subdued demand growth. This has allowed companies to maintain employment levels and continue building inventories in anticipation of stronger demand conditions ahead.
However, the inability to translate new orders into increased output remains a challenge for many firms. Survey respondents have cited difficulties in sourcing materials, exchange rate fluctuations in previous months, and cautious business sentiment as factors affecting their ability to expand production even as new business continues to grow.
The improvement in input cost pressures, particularly from lower purchase costs as the cedi strengthened against the dollar, has been offset by continued increases in staff costs. This mixed picture on the cost side has led to only modest reductions in selling prices, suggesting that firms are maintaining margins while passing through some cost savings to customers.
Looking ahead, the combination of stable price conditions, continued central bank policy easing, and sustained growth in new orders provides a foundation for potential expansion in private sector output. However, much will depend on whether demand conditions strengthen sufficiently to encourage firms to increase production levels and fully utilize their expanded capacity.
The competitive pressures evident in shortened supplier delivery times suggest that businesses along the supply chain have capacity available to support growth if demand materializes. The challenge for policymakers and business leaders will be to translate the current period of stability into sustained expansion that generates meaningful economic growth and job creation.
