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Wholesale prices of building materials in Metro Manila climbed to their highest level in more than a decade in May as construction activities resumed amid decreasing coronavirus infections, according to a report by BusinessWorld.
The wholesale price index for construction materials in the capital region rose to 8.3% from 6.9% in April and 2% a year earlier, according to preliminary data from the Philippine Statistics Authority.
The May index matched the rate in December 2011 and was the fastest since the 8.6% growth in November 2011. Bulk building prices have risen by 6.5% this year, faster than 2% a year earlier.
Economic reopening and the revival of construction activities might have boosted prices, Nicholas Antonio T. Mapa, senior economist at the ING Bank N.V. Manila Branch, said in an e-mail.
“Supply chain issues and bottlenecks may have also led to the delay in the delivery of key equipment and materials from abroad, which in turn pushed up costs onshore,” he said. “On the demand side, increased activity compared with last year will drive up prices as the economy remains relatively open.”
Fuel and lubricant prices jumped by 46.1% in May from 41.7% a month earlier. Reinforcing and structural steel prices increased by 15.7% from 11.2% in April.
Meanwhile, prices of galvanized iron sheets rose by 13.8% from 13.5% in April, while prices of PVC pipes increased by 10.3% from 3.8%. Prices of hardware (5.2% from 4.6%), painting works (5% from 4.7%), plywood (4.7% from 4.4%), lumber (4.2% from 3.8%), sand and gravel (3.8% from 2.7%), doors and jambs (2% from 1.9%) and glass (1.6% from 1.4%) also rose.
Bulk prices of tileworks inched up by 0.1%, a turnaround from a 0.4% decline in April.
On the other hand, the price increase in electrical works slowed to 8.6% in May from 9.5% in April, as did plumbing fixtures and accessories/waterworks (7.1% from 8%) and concrete products and cement (4.6% from 4.8%).
A sustained pickup in prices would probably continue for the rest of the year, Mr. Mapa said. “Prices of construction materials may remain on the uptrend as both supply and demand side pressures extend into 2023,” he said.
“However, we see the possibility of a less pronounced demand side pressure as construction outlays slow down from the pace in the first half. Demand side pressures will stay the same or may even accelerate,” he added.