Producer Price Index Rises to 29.1% in July; Driven by Mining, Quarrying, and Construction Sectors
Ghana’s Producer Price Index (PPI) surged to 29.1% in July 2024, underscoring intensifying inflationary pressures within the country’s industrial and services sectors. The 3.5 percentage point increase from June’s rate reflects a broader trend of rising costs across key areas of the economy, presenting challenges for policymakers and businesses alike.
The industrial sector, excluding construction, recorded a sharp increase in producer price inflation, climbing from 32.3% in June to 37.9% in July. This surge was largely driven by significant cost escalations in the Mining and Quarrying sub-sector, where inflation soared to 48.8%, up from 45.6% the previous month.
The manufacturing sub-sector also saw a marked rise, with inflation jumping 5.5 percentage points to 17.9%. Among manufacturing categories, the beverage industry was particularly hard-hit, experiencing a 44.0% inflation rate, while the manufacture of motor vehicles, trailers, and semitrailers followed closely at 38.2%.
The construction sector was not spared, with its inflation rate increasing to 30.5% in July. Within this sector, the construction of buildings saw a 2.2 percentage point rise to 17.8%, while civil engineering recorded a marginal increase to 36.9%. Specialized construction activities, however, witnessed a dramatic inflationary spike from 5.8% in June to 14.7% in July, signalling potential cost overruns in more technical construction projects.
In the services sector, inflation crept up to 12.6% in July, a modest rise from June’s 12.1%. The Transport and Storage sub-sector, a vital component of Ghana’s logistics network, saw its inflation rate increase by 2.7 percentage points to 26.8%. The Accommodation and Food Services sub-sector also experienced a slight uptick to 28.3%, reflecting rising operational costs. Meanwhile, the Information and Communication sub-sector remained relatively stable, with inflation at 9.3%.
The broad-based nature of these inflationary pressures suggests that Ghana’s economy is facing a challenging period, with rising production costs likely to impact both consumer prices and business margins in the months ahead.
