Prices of Dec. retail construction materials in metro rise faster
RETAIL price growth of building materials in the National Capital Region accelerated in December to the highest level in five months, the Philippine Statistics Authority (PSA) reported on Monday.
Preliminary data from the PSA indicate that the construction materials retail price index rose to 1.4% in December from 1.1% in November. The growth rate for December 2022 had been 5.6%.
The December reading was the highest since the 1.5% posted in July and equal to the August 2023 level.
In 2023, retail price growth of building materials in Metro Manila averaged 2.4%, slowing from 5.8% in 2022.
Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila, said that the slower year-on-year growth rate for building materials reflects a softening in global commodity prices due to weak demand.
“Onshore, we did note only a modest pickup in construction although a sustained push for public construction could keep construction prices supported,” he said in an e-mail.
In December, headline inflation slowed to 3.9% from 4.1% in November and 8.1% in December 2022.
In 2023, inflation averaged 6%, rising from 5.8% in 2022. It was the highest reading since the 8.2% posted in 2008.
Miscellaneous construction materials prices posted -0.3% growth in December from -1.2% in the previous month, the PSA said, noting that this category had the most outsized impact on the overall index number.
This was followed by plumbing materials (0.7% in December from 0.3% in November), painting materials and related compounds (2.6% from 2.4%), electrical materials (0.8% from 0.7%), and carpentry materials (0.7% from 0.6%).
Logging slower price growth were masonry materials (0.7% from 0.9%) and tinsmithry materials (2.9% from 3.1%).
The PSA noted that in 2023, “all commodity groups exhibited slower annual average increases relative to their annual average increments in 2022.”
“In 2024, we expect construction activity to remain in expansion, although the era of high borrowing costs and ongoing uncertainty over growth prospects could cap any sharp rise in construction costs,” Mr. Mapa said.
In its latest policy meeting, the Bangko Sentral ng Pilipinas decided to maintain its benchmark interest rate at a 16-year high of 6.5%.
The central bank had raised rates by a cumulative 450 basis points between May 2022 and October 2023 in its efforts to tame inflation. — Abigail Marie P. Yraola