Ghana’s Producer Price Inflation (PPI) fell to 10.2% year-on-year in May 2025, down from 18.5% in April. While the headline figure signals easing cost pressures across the economy, a deeper analysis reveals contrasting trends across key industrial sectors, with some recording substantial price gains while others experienced steep declines.
The Producer Price Index, which tracks changes in the average prices domestic producers receive for their goods and services, showed that while general price levels are moderating, inflation dynamics vary significantly across sub-sectors.
Manufacturing Sectors Outperform
Within the manufacturing sector, several industries posted strong year-on-year inflation figures. The manufacture of motor vehicles, trailers and semi-trailers led all sub-sectors with a 35.8% price increase, followed by leather and related products (32.5%), textiles (21.8%), and rubber and plastics (20.8%). These trends suggest sustained domestic demand or constraints in production and supply that are driving prices upward.
Other manufacturing segments such as beverages, furniture, and food products also recorded double-digit inflation, reflecting consistent consumer activity and price resilience in processing industries.
Downturn in Energy and Resource-Linked Industries
Conversely, several resource-related sectors recorded marked deflation. The refining of petroleum products showed a year-on-year decline of 11.2%.
In the mining and quarrying sector, mining support service activities saw a steep 18.0% drop, while the extraction of crude petroleum and natural gas declined by 8.9%. These contractions point to weaker price conditions in Ghana’s mineral extraction space and suggest limited short-term pricing power in global markets.
Services and Transport See Mixed Movements
The transportation and storage sector experienced the most notable monthly deflation at -13.5%, indicating significant reductions in transport-related costs. This may benefit downstream sectors and consumers, but could indicate margin compression in logistics and haulage services.
In contrast, sectors such as electricity and gas saw a 4.6% month-on-month increase, marking the only major sector to record price growth between April and May. This upward movement may be driven by tariff revisions or higher operational input costs.
Within services, while segments like air and water transport registered strong year-on-year inflation (22.0% and 32.3% respectively), others, such as land transportation (-3.2%) and telecommunications (0.0%), remained flat or negative, suggesting diverging demand conditions across service-based industries.
Construction and Utilities Hold Steady
The construction sector presented a split picture. While overall construction inflation stood at 7.4% year-on-year, specialized construction activities surged to 17.7%, whereas the construction of buildings declined by 3.2%. These figures suggest ongoing strength in infrastructure or technical projects, with reduced activity in real estate or residential construction.
In the utilities sector, water supply and waste management remained stable at 4.2%, maintaining moderate inflation with minimal volatility.
Implications for Business and Policy
The PPI sectoral breakdown underscores the need for differentiated strategies across industries. Rising prices in manufacturing suggest room for expansion and pricing power, while deflation in transport, mining, and energy-linked sectors signals the need for caution, efficiency, and possibly restructuring.
For investors and policymakers, the data provides critical insights for targeted support and resource allocation. Businesses in high-growth sectors may consider capitalizing on current momentum, while those in deflationary segments may need to adapt through cost containment and operational efficiencies.
