Wholesale prices growth of building materials rise in April

Wholesale price growth of construction materials in the National Capital Region (NCR) rose in April, the Philippine Statistics Authority (PSA) reported on Friday.

The construction materials wholesale price index (CMWPI) in Metro Manila slightly picked up by 0.3% year on year in April, inching up from the 0.2% growth in March. However, this was lower than the 0.7% growth recorded in April 2024.

In the four months to April, Metro Manila’s CMWPI averaged 0.2%, slower than 1% growth during the same period.

The pace recorded in April was the fastest in nine months or since the 0.5% growth in July 2024.

Contributing to last month’s increase were faster growth in tileworks (3.6% from 1% in March), sand and gravel (0.4% from 0.3%), electrical works (0.4% from 0.3%), and painting works (1.1% from 1%).

The year-on-year growth in other commodities remained unchanged when compared with the previous month: plumbing fixtures & accessories/waterworks (0.9%) and doors, jambs, and steel casement (0.4%).

In a separate report by the PSA, the construction materials wholesale price index (CMWPI) in April eased to 1%, lower than 1.2% growth of March. It also cooled from 1.2% in April 2024.

Year to date, CMRPI averaged 1.1%, easing a bit from 1% growth in January-April 2024.

April print was the lowest in more than a year or since the 0.6% in March 2024The CMRPI is based on 2012 constant prices, while the CMWPI is based on 2018 constant prices.

The PSA attributed the slower annual CMWPI growth to prices in carpentry which slowed down by 0.4% in April from 0.7% in March and tinsmithry materials with 1.5% from 1.6%.

Commodity groups where rates steadied were painting materials and related compounds (2.4%), plumbing materials (0.7%) and miscellaneous construction materials (0.3%).

Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said that the modest construction growth could be influenced by several factors such as election ban and tariff risks.

“The ban on public works during the election period can lead to delays in construction projects and procurement of materials. This restriction, aimed at preventing the misuse of public funds for electioneering, often results in a temporary slowdown in construction activities. This can affect the demand for construction materials, contributing to the modest growth observed,” Mr. Ravelas said in a Viber message.

Mr. Ravelas added that tariffs on imported construction materials can increase costs and disrupt supply chains.

“These tariffs create uncertainty in the market, as companies may face higher expenses and delays in material delivery, impacting overall project timelines and budgets,” he said.

Source: Business World

Why some Hong Kongers live in homes smaller than a parking space

Landlords in Hong Kong, a city with a notoriously high cost of housing, have found they can make more money by dividing a flat into two or more units

Tens of thousands of people in densely populated, land-poor Hong Kong live in tiny dwellings made by dividing up apartments, most smaller than a parking space. It’s an affordable option for students and low-income families but can also mean banging shins in cramped and in some cases substandard living spaces.

The city’s government has proposed new rules that would set minimum standards for such housing units, but residents and advocates for the poor worry that it could drive up rents and make it even harder to hang on in the city. The city’s eventual goal, mandated by Beijing, is to eliminate subdivided apartments over the next 25 years.

Officials are aiming to pass the rules into law within the year. After that, landlords will have a grace period to make their substandard flats meet the bar. The government has promised to assist affected residents in resettlement and adopt a gradual approach in its policy implementation to avoid causing panic.

Here are some of the numbers that illustrate the residents’ living conditions and the proposed policy.

7.5 million Hong Kong’s population in mid-2024

80 square kilometers (31 square miles) How much land is used for housing in the densely-packed territory, according to the city’s planning department

110,000 The number of dwellings created by dividing apartments

220,000 The number of people who live in them

10 square meters (110 square feet) The median size of the units that have been carved out. About one-fourth are less than eight square meters (86 square feet), the minimum size mandated under the proposed rules

12.5 square meters (135 square feet) The standard size of a parking space in Hong Kong

5,000 Hong Kong dollars: or PHP 37,000 the median rent for a unit in a subdivided apartment

33,000 Estimated number of units that would need major renovations under the proposed rules

2049 The year by which China’s central government wants Hong Kong to phase out subdivided units. It will mark 100 years of communist rule in China.

Source: Philstar

Building permit approvals continued to fall in January

Approved building permits continued to decline by record double digits in January, the Philippine Statistics Authority (PSA) reported.

The PSA, citing preliminary data, said building projects covered by the permits numbered 12,526 in January, contracting by 14.6% from 14,665 a year earlier.

This was the second straight month that construction starts fell. January’s decline was steeper than the revised 5% year-on year drop logged in December last year.

It was the largest decline to date since the PSA began tracking the indicator on a monthly basis in January 2024. Previously, approved building permits data were released on a quarterly basis.

Building projects in January covered a floor area of 3.72 million square meters (sq.m), up 29.5% from a year earlier.

Construction projects represented by the permits were valued at P48.58 billion in January, 26.1% higher from P38.52 billion a year earlier.

Reinielle Matt M. Erece, economist at Oikonomia Advisory and Research, Inc. said that the decline in construction activity can be an indicator of a “waiting” behavior from developers as they expect rate cuts this year, which can help them save costs in financing these projects.

“I expect this behavior to change this year as rate cuts are seen underway and the price of construction materials has stabilized,” he said.

Last year, the Bangko Sentral ng Pilipinas (BSP) slashed benchmark rates by a total of 75 basis points (bps) since its easing cycle in August, bringing policy rate at 5.75%.

However, in February during its first policy meeting this year, the BSP kept its policy settings, surprising market expectations and at the same time signaled fewer rate cuts this year.

BSP Governor Eli M. Remolona told Bloomberg in a televised interview last March 19 that the central bank could still cut rates next month up to 75 bps if economic output weakens.

Headline inflation rose 2.9% in January, steady as December.

In February, inflation slowed to 2.1%, bringing the average inflation rate in the first two months to 2.5%, within the central bank’s 2-4% target.

Additionally, retail price growth in the National Capital Region (NCR) eased to 1.2% in January, its weakest pace in five months.

Construction materials retail price index (CMRPI) in January was slower than the 1.5% in December and 1.4% recorded in January 2024.

On the other hand, construction materials wholesale price index (CMWPI) also slowed to a record 0.1% that month, lower than the 0.2% in December and 1.5% a year earlier.

The CMRPI is based on 2012 constant prices, while the CMWPI is based on 2018 constant prices.

The PSA noted that residential had the highest number of constructions at 7,671 or 61.2% of the total number of constructions during the month.

However, this segment dropped 14.1% year on year. Residential projects were valued at P20.94 billion higher than the P16.35 billion in January 2024.

Single homes accounted for 89.5% of the residential category with approved permits contracting by 11.3% to 6,863.

Permits for apartment buildings fell by 35% to 708, while permits for duplex or quadruplex homes also went down by 13% to 80.

Nonresidential projects, on the other hand, slipped 4.3% to 3,138 from 3,278 from January 2024.

These projects accounted 25.1% of the total and were valued at P24.16 billion, 40.4% higher from a year ago.

Approved commercial constructions which made up 72.9% of the nonresidential category dipped by 3.1% to 2,288 from 2,362 in January 2024.

Institutional permits were also down by 0.6% to 480 while industrial permits fell 13.1% to 193.

Meanwhile, approved agricultural projects went down by 7.6% to 109 from 118 a year earlier. Other nonresidential projects contracted by 26.9 to 68 year on year.

Alteration and repair permits fell by 17% to 977 and were valued at P2.49 billion.

On the other hand, approved permits for additions, construction that increases the height or area of an existing building, surged 24.8% to 463 from 371 in January 2024.

Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) had the most approved building projects, accounting for 26.2% of the total, with 3,279 construction projects, followed by the Central Luzon (1,314 permits) and Ilocos Region (1,135 permits).

The PSA said construction statistics are compiled from the copies of original application forms of approved building permits as well as from demolition and fencing permits collected monthly by the agency’s field personnel from the offices of local building officials nationwide.

Source: Business World