Construction materials prices slows in May

The wholesale price growth of construction materials in Metro Manila slowed down in May compared to last year's rate due to lower annual increase of electrical works, the Philippine Statistics Authority (PSA) said.

Latest data showed that the average growth of the construction materials wholesale price index (CMWPI) in the National Capital Region slowed to 0.6 percent last month from 6.6 percent in May 2023.

On a monthly basis, it was also slower compared to April's 0.7-percent growth rate.

"The deceleration in the annual growth rate of CMWPI was mainly caused by the slower annual increase of electrical works at 1.7 percent in May 2024 from 2.6 percent annual increment in April 2024," the PSA said.

Hardware also posted a 2.7-percent year-on-year growth in May, slower from the 3.0 percent in the previous month.

Seven other commodity groups registered slower annual increases during the month as compared with April.

Plywood posted 1.4-percent growth in May from 1.5 percent a month earlier; lumber with a 0.4-percent growth from 0.5 percent in the previous month; GI sheets registered a 3.1-percent growth rate from 3.2 percent; and structural steel with 1.1 percent from 1.6 percent.

In addition, doors, jambs and steel casement posted a 0.9-percent growth rate during the month from 1.0 percent; painting works with 1.6 percent from 1.9 percent; and PVC pipes with 0.7-percent growth rate from the previous month's 0.9 percent.

Annual decreases, meanwhile, were recorded in the price index of sand and gravel at 0.6 percent in May from 1.2-percent annual increase in April. Further annual drop was seen in prices of tileworks, which recorded a 1.0-percent drop from 0.2 percent a month earlier.

On the other hand, metal products posted higher annual growth rates at 1.0 percent in March from 0.7 percent of the comparable period, and fuels and lubricants at 15.3 percent from 10.9 percent.

An annual increase was also seen in the index of plumbing fixtures and accessories at 0.5 percent in May 2024 from a 0.2-percent annual decrease a month earlier.

Slower annual decreases, meanwhile, were recorded in the indices of cement at 2.1 percent from 2.5-percent annual drop in the previous month and reinforced steel at 1.0 percent from 1.1-percent annual decline.

Source: Philippine Statistics Authority

NCR May building material price growth slows

The growth in wholesale prices of construction materials in Metro Manila eased to a 15-month low in May as high borrowing costs dampened construction demand.

According to preliminary data from the Philippine Statistics Authority (PSA), the construction materials wholesale price index (CMWPI) in the National Capital Region (NCR) grew 6.5% year on year in May, against the 7.4% posted in April and the 8.3% from a year earlier.

In the first five months, index growth averaged 8%, against the 6.5% growth rate seen in 2022.

The May reading was the weakest since the 5.2% growth posted in February 2022.

“Slowing construction materials inflation may be traced to softer construction activity as rate hikes sap demand,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a Viber message on Tuesday.

Since May 2022, the Bangko Sentral ng Pilipinas has raised policy rates by 425 basis points to curb surging inflation.

The impact of policy tightening has since found its way into market prices as headline inflation slowed for a fourth straight month to 6.1% in May.

“The main contributor to the lower annual growth rate of CMWPI was the heavily weighted reinforcing and structural steel index, which registered annual growth of 4.1% in May from 6.5% in April,” the PSA said.

Of the 17 commodity groups, seven registered slower price growth, led by hardware (6% in May from 6.8% in April), plywood (4.3% from 4.8%), lumber (6.2% from 7%), G.I sheets (13.8% from 14.3%), doors, jambs, and steel casements (5.2% from 5.4%), and painting works (12.4% from 13.1%).

Growth in wholesale prices for concrete products accelerated to 9.1% from 9% in the previous month. Higher price growth was also reported for tileworks (1.4% from 1.3%), electrical works (6.3% from 6.2%), and plumbing fixtures and accessories/waterworks (4.2% from 3.9%).

Price growth declined for glass and glass products (0.2% from 0%), PVC pipes (3.7% from 1.3%), and fuel and lubricants (19.4% 11.9%).

Growth in wholesale prices for sand and gravel was unchanged at 4.7%.

Mr. Mapa expects the downward trend to continue as rate hikes “continue to whittle away at construction demand.”

Source: Business World