Two critical sectors of Ghana’s economy, Industry and Construction have witnessed a slowdown in the prices of goods and services charged by the producers in these sectors.
The price slowdown experienced by producers in these two sectors marks a possible future respite for Ghanaian consumers who utilize goods and services from these sectors.
The latest data Producer Price Index (PPI) data published by the Ghana Statistical Service (GSS) revealed that the general Producer Price Inflation for the economy dropped from 33% in October 2024 to 26.9% in November 2024 marking a 6.1 percentage points decrease. The industry and construction sectors of the economy fueled this drop.
The GSS data reveals that the PPI for the industrial sector significantly fell from 48.9% in October to 41.3% in November. This signifies that players in the industrial sector who produce our locally-made goods although charged more for their goods at the factory gates, the rate of increase in price was at a slower rate compared to October 2024.
The construction sector also saw a very marginal drop from 31.5% in October 2024 to 31.1% in November 2024.
The services sector also recorded what can be described as a virtually insignificant increase from 12.4% in October 2024 to 12.5% in November 2024.
These sectors; Industry, Construction, and Services in addition to others are what economists describe as real sectors of the economy that deal in the production of tangible goods hence the trend of their PPI is a matter of concern for every Ghanaian.
Although the changes in the Construction and Services sectors are not significant, the drop in the Industrial sector has a potential impact on consumers.
The positive increase but at a slower rate relative to the previous month implies that all things being equal, future increases in the cost of goods, especially manufactured products, might be less severe. Over time, this may help to ease the pressure on household budgets if businesses pass on smaller price increases to consumers.
The development in the industrial sector also implies the possibility of a slower increase in production costs such as raw materials, energy, or transport. Businesses may find it easier to plan and operate since they are not facing rapid cost increases. It could also encourage them to maintain or lower the prices of their goods and services, boosting sales.
In the construction sector, the marginal reduction in producer inflation could lead to more predictable project costs, which is crucial for developers and contractors. This stability may attract more investments into housing and infrastructure projects, creating jobs and stimulating economic activity.
