Ghana’s industrial sector remains under pressure, contracting by 1.8% in August 2025, according to the latest Monthly Indicator of Economic Growth (MIEG) released by the Ghana Statistical Service (GSS).
Although the decline is still significant, it reflects a slight improvement from the deeper contraction of 3.1% in July 2025. This modest recovery, however, does little to change the broader picture of a sector that has now weakened for two consecutive months.
According to Government Statistician Dr. Alhassan Iddrisu, the slowdown highlights ongoing structural issues within the industrial economy. The MIEG report clearly identifies the drivers of the decline, stating that the contraction is caused by “falling petroleum production and reduced manufacturing activity.”
Petroleum Production Slump Remains the Largest Drag
The August MIEG makes it evident that petroleum production is the most significant factor behind the contraction. Because the index is built using the same underlying data sources used in quarterly GDP, changes in petroleum output have an immediate and measurable impact on the monthly industrial index.
This is clearly demonstrated in the year-on-year comparison:
- August 2024: Industry expanded 9.1%
- August 2025: Industry contracted 1.8%
This sharp reversal reflects how lower petroleum output has pulled the sector downward. The document also notes that industry typically behaves in line with underlying production data, and because the MIEG uses first-available data, early declines in petroleum volumes show up immediately in the monthly figures.
Since petroleum is one of the most heavily weighted components in the industrial sector, even small declines can disproportionately affect the total index.
Manufacturing Output Drops Again, Reinforcing Sector Weakness
The weakening manufacturing sector is another major contributor. The GSS revised July’s MIEG from 4.5% to 3.7% after receiving updated data that reduced earlier estimates. The downward revisions affected several sub-sectors, including:
- manufacturing
- mining and quarrying
- trade
- accommodation and food service activities
- transportation and storage
This suggests that the manufacturing issues are not limited to August. They have been intensifying over the previous months, affecting both July and August results. Because the MIEG is “less detailed and more volatile” and relies on “first-available data,” any drops in manufacturing activity quickly lower the overall industrial index.
The document shows that industrial activity has been inconsistent for months, reflecting ongoing strain across multiple linked sub-sectors.
Momentum
The industrial contraction continues to weigh on Ghana’s broader growth. In August:
- Industry dragged overall growth by –0.6 percentage points
- Services added 4.1 percentage points
- Agriculture added 1.4 percentage points
This means industry is the only major sector pulling growth downward, while the other two sectors are driving the national expansion.
Comparatively, in July 2025, the industry performed even worse with a –3.1% contraction, showing that although the decline softened slightly in August, the sector remains weak.
August Shows Slight Improvement, but Underlying Challenges Persist
The industrial index comparison across the last three years illustrates the sector’s weakening momentum:
- August 2023: 100.2
- August 2024: 109.3
- August 2025: 107.3
This trend means that although the sector surged strongly in 2024, it has since fallen below last year’s performance. The MIEG highlights that the index is not seasonally adjusted and is sensitive to real-time production changes. Because petroleum and manufacturing are both underperforming, the sector cannot maintain the momentum it had last year.
Strong Services and Agriculture Performance Deepen the Contrast
While industry struggles, the rest of the economy remains resilient. The total MIEG index rose from 102.7 in August 2024 to 108.0 in August 2025, indicating broad-based economic activity growth. Agriculture expanded by 7.4%, and services surged by 9.6%, both significantly outperforming the industry.
The report explains that services are being driven by growth in ICT, education, and trade, while agriculture is supported by stronger crop production, all areas that showed upward trends in August.
The sustained weakness in the industrial sector raises concern about its long-term stability. Petroleum production remains the largest structural risk, and reduced manufacturing activity, as indicated by repeated downward revisions, suggests broader difficulties across industrial operations.
