Even though the coronavirus pandemic has smashed business confidence and caused problems for the private sector, especially before and during the three-week lockdown in April, a market report has indicated that confidence has rebounded some few weeks after the restrictions were eased.

A report, authored by IHS Markit Ghana PMI, shows the headline seasonally adjusted Ghana’s Purchasing Managers’ Index rose by 15 index points in May, registering 46.7 from the record low of 31.7 posted in April. This effectively shot up business confidence to higher levels that has not been experienced since November 2018.

The private sector moved towards stabilisation in May as a loosening of coronavirus disease (COVID-19) lockdown measures resulted in much softer reductions in output and new orders than the unprecedented declines recorded in April.

However, Economics Director at IHS Markit, Andrew Harker, says the rebound in confidence does not necessarily mean business activities have picked up and come back to normal, but simply suggests, the rate of contraction slowed substantially from that seen in April as some firms restarted operations following a loosening of COVID-19 lockdown measures.

“While still signaling a private sector in decline, the May PMI data for Ghana provide cause for encouragement. Rates of contraction in output and new orders eased markedly following the loosening of lockdown restrictions, with both nearing stabilisation,” he said in the report.

That notwithstanding, the report adds, there were still marked job cuts recorded in May, only the pace of reduction was slightly softer than that seen in April. Some business owners said they had to cut down on staff due to social distancing rules.

Mr. Harker said the job cuts situation raises a cause for concern, especially, the fact that most of them are as a result of social distancing rules. He maintains this could potentially delay any return to net hiring, even if new order volumes improve.

He added that the data raise hopes that a return to growth in the economy may even be seen in June as President Akufo-Addo has further eased the restrictions he imposed in March to contain the spread of the disease.