Construction materials’ prices rise 5.6% in December

Retail and wholesale prices of building materials in the National Capital Region (NCR) continued to rise at a slower pace in December compared to the previous month, the Philippine Statistics Authority (PSA) said in a report by Philippine Star.

Data from the PSA showed the annual increase of the Construction Materials Retail Price Index (CMRPI) in NCR eased further to 5.6 percent in December last year from 6.2 percent in November.

Compared to the 2.7 percent growth in December 2021, construction materials’ retail prices picked up at a much faster pace in the same month last year.

“The slowdown in the annual change of CMRPI was mainly due to the lower annual hikes in the indices of tinsmithry materials at seven percent in December 2022 from 8.2 percent in November 2022; and miscellaneous construction materials at 8.9 percent, from 10.1 percent,” the PSA said.

It said slower annual mark-ups were also seen in the following commodity groups in December: carpentry materials; electrical materials; painting materials and related compounds; and plumbing materials.

Meanwhile, the growth in masonry materials index was unchanged at 4.4 percent.

For full-year 2022, the NCR’s CMRPI averaged 5.8 percent, up from 1.6 percent in 2021.

In a separate report, the PSA said the Construction Materials Wholesale Price Index (CMWPI) in NCR posted a slightly slower annual growth rate of 10.3 percent in December compared to the 10.4 percent in November.

The growth posted in December 2022, however, was higher than the 5.2 percent increase in the same month in 2021.

“The lower annual growth in CMWPI was primarily brought about by the downtrend in the heavily-weighted index of reinforcing and structural steel at 12.3 percent during the month, from 12.7 percent in November 2022,” the PSA said.

Also posting slower annual increments are hardware,plywood, plumbing fixtures and accessories or waterworks, and fuels and lubricant.

Building materials with higher annual gains in December compared to November are sand and gravel, lumber, G.I. sheet, electrical works and painting works.

Those which retained their November growth rates in December are concrete products and cement, tileworks, PVC pipes, asphalt and machinery and equipment rental.

CMWPI growth averaged by 8.3 percent last year, up from 3.2 percent in 2021.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email the slowdown in construction materials’ prices is partly due to the recent healthy downward correction in the US dollar or peso exchange rate and in global oil and other major commodity prices from much higher levels earlier in 2022 especially shortly after the start of the Russia-Ukraine conflict, leading to an easing of import prices or costs.

“However, the year-on-year increase in construction materials in December 2022 is still faster compared to a year ago, reflecting still relatively elevated inflation prices or inflation as largely triggered by the Russia-Ukrainian war, despite some easing of inflationary pressures towards the end of 2022,” he said.