The Producer Price Index (PPI) took a sharp decline from 25.1 percent in September 2023 to 9.6 percent in October 2023, according to the Ghana Statistical Service (GSS).
This substantial 15.5 percentage point reduction in producer inflation from the previous month signals a significant positive shift within the economic landscape. Moreover, the month-on-month change in the PPI between September 2023 and October 2023 saw a 1.1 percent increase.
The PPI serves as a crucial metric for assessing inflationary pressures within Ghana’s production sectors, by capturing the average price shifts received by domestic producers for their goods and services.
Breaking down the data by sector, the producer price inflation in the industry, excluding construction, decreased to 9.0 percent in October 2023 from 26.4 percent in September 2023. The construction sector’s rate also experienced a decline, dropping to 44 percent for October 2023 from 48.9 percent in the previous month. Meanwhile, the Services sector observed a decrease from 16.1 percent in September 2023 to 11.7 percent for October 2023.
A deeper analysis of the data reveals a significant deceleration in inflation trends for October 2023. This should offer relief to businesses grappling with escalating costs. However, specific sectors such as Construction (44.0 percent), Electricity and gas (39.6 percent), Water supply, sewerage and waste management (25.8 percent), Information and Communication (12.7 percent), Accommodation and food services (11.1 percent) and Mining and quarrying (10.4 percent) recorded rates above the national average. Conversely, manufacturing activity recorded the lowest rate of 3.2 percent in October 2023.
Sector-specific insights
Industry PPI:
In the industry sector, excluding construction, the year-on-year producer inflation stood at 9 percent in October 2023, with a monthly change rate of 1.2 percent. Among sub-sectors, Electricity and gas recorded the highest year-on-year producer price inflation rate of 39.6 percent, followed by Water supply, sewerage and waste management at 25.8 percent. Conversely, the Manufacturing sub-sector reported the lowest year-on-year producer inflation rate of 3.2 percent.
Construction PPI:
For the construction sector, the year-on-year producer inflation was 44 percent in October 2023, accompanied by a monthly change rate of 0.4 percent. Within this sector, civil engineering reported the highest year-on-year producer price inflation rate of 67 percent, followed by specialised construction at 7.3 percent. The buildings construction sub-sector registered the lowest year-on-year producer inflation rate of 4.3 percent.
Services PPI:
Similarly, in the Services sector, there was a decrease from 16.1 percent in September 2023 to 11.7 percent in October 2023, with a monthly change rate of 0.4 percent.
These statistics depict a notable downturn in producer price inflation across various sectors, signaling a positive trajectory for economic stability.
Source: thebftonline.com