Manufacturing Sector Rebounds as Producer Inflation Rises to 2.5% in October
By Praisebell Rosemond Larbi
Ghana’s manufacturing sector recorded a notable rebound in October 2025, as factory-gate prices rose, signaling improved industrial activity and growing domestic demand. According to the latest Producer Price Index (PPI) released by the Ghana Statistical Service (GSS), manufacturing inflation increased to 2.5 percent in October, up from 1.7 percent in September.
The increase reflects stronger activity in textiles, plastics, beverages, and food products, underpinned by steady demand and improved access to raw materials. With the manufacturing sector accounting for 35 percent of the total PPI basket, changes in this sector carry significant implications for overall industrial performance and consumer pricing trends.
The GSS report highlights substantial year-on-year producer price increases in key sub-sectors. The manufacture of textiles led with a 35.0 percent rise, followed by rubber and plastics products at 26.7 percent, beverages at 17.6 percent, and food products at 13.9 percent. Other industries, including chemicals, fabricated metal products, printing, motor vehicle assembly, and furniture manufacturing, also recorded positive inflation growth, reflecting improved production activity and rising demand both locally and for exports.
The rebound, analysts say, is supported by ongoing government industrialisation initiatives and increasing private-sector investment. Improved access to imported raw materials, coupled with relatively stable exchange rates, has also contributed to the sector’s gradual recovery. Demand from domestic retailers and regional export markets has steadily strengthened since the third quarter of the year, reinforcing positive price movements across several manufacturing categories.
However, the recovery remains uneven. Certain manufacturing sub-sectors reported negative producer inflation, indicating persistent challenges. These include coke and refined petroleum products (–10.1%), basic metals (–9.0%), wood and wood products (–6.7%), and transport equipment (–2.0%). GSS analysts attribute these declines to falling global commodity prices, stiff competition from imports, reduced construction demand, and supply chain delays affecting component-heavy industries.
Despite these pockets of weakness, economists emphasise that the rise in manufacturing inflation is not necessarily a sign of rising production hardships. Rather, it reflects a healthier industrial ecosystem where steady demand allows manufacturers some pricing power. The sector’s recovery is also crucial for employment, as manufacturing remains one of Ghana’s leading job creators, particularly in food processing, agro-industry, packaging, light engineering, and textiles.
Month-on-month manufacturing inflation also rose from 0.2 percent in September to 1.5 percent in October, indicating some short-term pressure on production costs. Manufacturers note that while the increase is manageable, it underscores the importance of operational efficiency, diversification of raw material sources, and adoption of modern technology to remain competitive.
The GSS urged businesses to monitor producer inflation trends closely, using the data to guide pricing strategies, operational planning, and investment decisions. In addition, the statistical service recommended that government continue prioritising incentives that promote technology adoption, workforce upskilling, and development of competitive local value chains to strengthen the manufacturing sector further.
Industry players remain cautiously optimistic, acknowledging that while demand is improving, uncertainties persist around electricity tariffs, fuel prices, port charges, and exchange rate fluctuations, factors that could influence future production costs and pricing trends.
