Producer Price Index (PPI) displayed a notable decrease in September 2023, falling from 28.3 percent in August 2023 to 25.1 percent, according to data from the Ghana Statistical Service (GSS).
This reduction of 3.1 percentage points in producer inflation compared to August 2023 (28.2 percent) signals a positive shift in the economic landscape. Notably, the month-on-month change in the PPI between August 2023 and September 2023 increased by 2.7 percent, a significant contrast to the previous month’s contraction of –0.4 percent.
The PPI plays a crucial role in gauging inflationary forces within the production sectors by capturing the average shift in prices received by domestic producers for their goods and services.
Sector-specific analysis
Industry PPI:
In the industry sector, excluding construction, the year-on-year producer inflation rate stood at 26.6 percent in September 2023; down from 30.6 percent in August 2023. There was a significant monthly adjustment rate of 2.9 percent in September 2023 compared to the previous month’s -0.6 percent, suggesting potential price risks within this sector.
Within this sector, the electricity and gas sub-sector recorded the highest year-on-year producer price inflation rate at 50.9 percent, although it had decreased from 68.3 percent in August 2023. This highlights elevated costs within the energy sector, a vital area for the economy.
The mining and quarrying sub-sector followed with a rate of 33.5 percent. In contrast, the manufacturing sub-sector posted the lowest year-on-year producer inflation rate at 16.0 percent, down from 23.5 percent in August 2023. On a monthly basis, both the mining and quarrying sub-sector and electricity and gas sub-sectors showed minimal variation.
Construction PPI:
The construction sector witnessed a marginal decline in the year-on-year producer inflation rate, reaching 23.1 percent in September from 24.6 percent the prior month. The monthly change rate for this sector was more significant at 0.2 percent from 6.8 percent in the prior month, indicating shifts in pricing dynamics.
The civil engineering sub-sector recorded the highest year-on-year producer price inflation rate of 27.0 percent, followed by the construction of buildings sub-sector with 15.5 percent. The specialised construction sub-sector recorded the lowest year-on-year producer inflation rate of 7.4 percent.
From a monthly perspective, the specialised construction activities sub-sector recorded the highest monthly inflation rate of 0.5 percent, followed by the construction of buildings sub-sector with 0.3 percent; and the civil engineering sub-sector recorded the lowest month-on-month inflation rate of 0.1 percent in September 2023.
Services PPI:
In the services sector, the year-on-year producer price inflation rate increased to 16.1 percent in September 2023 from 15.5 percent in August 2023, with the monthly rate also increasing to 2 percent from 0.1 percent in the prior month. This sector holds immense significance within Ghana’s economic landscape, encompassing a spectrum of industries.
When dissecting data within the services sector, the transport and storage sub-sectors recorded the highest year-on-year producer price inflation rate of 28.8 percent, followed by the accommodation and food service sub-sectors with 24.0 percent. The information and communication sub-sector recorded the lowest year-on-year producer inflation rate of 13.3 percent.
From a monthly perspective, the information and communication sub-sector recorded the highest monthly inflation rate of 2.3 percent, followed by the accommodation and food service sub-sector with an inflation rate of 1.7 percent. The transport and storage sub-sector recorded the lowest monthly inflation rate of 0.8 percent in September 2023.
