Industrial Sector Shows Resilience

– Records year-on-year growth rate of 8.2%

Story: Isaac AIDOO, Accra

GHANA’S industrial sector demonstrated notable resilience in the second quarter of 2024, recording a year-on-year growth rate of 8.2%, according to the latest data published by the Ghana Statistical Service (GSS).

This marks a significant increase in production across various sub-sectors compared to the same period in 2023.

Quarter-on-quarter, the sector posted a marginal growth of 0.3%, reflecting steady progress despite certain challenges in specific sub-sectors.

Key Growth Drivers:

• Manufacturing: The manufacturing sub-sector grew by 8.3% year-on-year, continuing its role as a key contributor to the industrial sector’s growth. Within this, the manufacture of other transport equipment recorded an impressive 20.9% growth. However, the production of coke and refined petroleum products declined by 1.8%. Quarter-on-quarter, manufacturing saw a modest 0.7% increase, with the production of basic metals surging by 18.5%, while food products saw a sharp decline of 12.3%.
• Mining and Quarrying: This sub-sector led the industrial charge, recording a year-on-year growth of 9.2%. On a quarter-on-quarter basis, the growth stood at 0.3%, indicating consistent output levels. The mining and quarrying sector’s performance reflects its critical role in Ghana’s industrial output, driven largely by strong commodity demand.
• Water Supply, Sewage, and Waste Management: This sub-sector posted a 1.2% year-on-year growth, while quarter-on-quarter growth was more pronounced at 2.8%. Despite this, waste collection within the sub-sector saw a decline of 4.8% compared to a modest 0.9% increase in Q1.

Sub-Sector Declines:

• Electricity and Gas: The sector faced a contraction, with production dropping by 1.4% year-on-year and a more substantial 4.3% decline quarter-on-quarter. This reflects challenges in energy production and distribution, which could impact other sectors reliant on stable electricity and gas supplies.

Overall Performance:

The Index of Industrial Production (IIP) for Q2 2024 was 99.8, up from 92.2 in Q2 2023, highlighting the significant overall improvement in industrial activity. The IIP provides a snapshot of the volume of goods and services produced within the sector and serves as a key indicator of Ghana’s industrial health.

Conclusion

Ghana’s industrial sector continues to show strong recovery, driven primarily by manufacturing and mining.

However, the declining performance in the electricity and gas sub-sector signals potential bottlenecks that may need addressing to ensure sustained growth across all sectors. The industrial sector’s performance will remain a critical factor in determining Ghana’s overall economic outlook for the rest of 2024.