July price growth for building materials slows

THE GROWTH in wholesale prices of building materials in Metro Manila slowed in July, amid increasing construction activity.

The wholesale price index for construction materials in the National Capital Region (NCR) eased to 8.7% year on year in July, from the almost 14-year high of 8.9% in June, preliminary data from the Philippine Statistics Authority (PSA) showed. This was higher than 2.3% in July 2021.

It was also the slowest rise in bulk prices in two months or since 8.3% in May.

Year to date, bulk prices of building materials have accelerated by 7.1%, faster than 2% in the same period a year ago.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the latest data confirm the recovery of the construction sector amid economic reopening.

“This means more demand for materials. The subsector has been one of the better performers in terms of employment generation, capital expansion and output year to date,” he said in an e-mail.

Mr. Roces said the slower price growth reflected the easing prices of imported materials in July.

“As such, costs to builders may be easing a bit,” he said.

Wholesale prices of fuel and lubricants slowed to 41.3% in July from 48.4% a month earlier. Reinforcing and structural steel prices, likewise, slowed to 14.9% from 16.5% in June.

Other commodity groups that posted slower price growth were galvanized iron sheets (13% in July from 14.6% in June), PVC pipes (9.8% from 11.2%), electrical works (8.4% from 8.7%) and plywood (4.9% from 5.1%).

Meanwhile, prices of plumbing fixtures and accessories/waterworks increased to 7.9% from 7.6%, while painting works rose by 7% from 6.2%.

Faster price growth was seen in hardware (5.8% from 5.7%); concrete products and cement (5.7% from 5.2%); sand and gravel (5.1% from 4.7%); lumber (4.8% from 4.2%); doors, jambs and steel casement (2.5% from 2.2%); and tileworks (1.2% from 0.7%).

Mr. Roces signaled “cautious optimism” for the construction sector in the coming months.

“The infrastructure push by the government where 5% of spending will go, that’s good for the sector as well,” he said. — Abigail Marie P. Yraola