Prices of building materials climb at fastest pace in over 3 years

MANILA, Philippines — Growth in retail prices of building materials in Metro Manila in July hit its highest level in over three years, driven by the faster increase in prices of painting materials, according to the Philippine Statistics Authority (PSA).

Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email that the faster increase in retail prices of construction materials was largely due to the impact of the Middle East conflict that started in February this year.

Data released by the PSA showed that the Construction Material Retail Price Index (CMRPI) in the National Capital Region posted a 2.1 percent growth in July from the previous month’s 1.8 percent.

Last month’s CMRPI growth was the highest posted since the 2.6 percent increase in May 2023.

The July CMRPI growth was also higher than the one percent uptick in the same month last year.

From January to July, average CMRPI growth stood at 1.6 percent.

The PSA attributed the higher CMRPI growth in July primarily to the faster increase in painting materials and related compounds index at 2.7 percent from 2.3 percent in the previous month.

Five other commodity groups also posted faster growth rates in July compared to the previous month.

These are: electrical materials (1.9 percent from 1.7 percent); masonry materials (2.4 percent from 2.3 percent); plumbing materials (0.9 percent from 0.7 percent); tinsmithry materials (3.1 percent from three percent) and miscellaneous construction materials (1.8 percent from 1.5 percent).

Meanwhile, carpentry materials retained their previous month’s growth rate of 0.9 percent in July.

Ricafort said the conflict led to higher global crude oil prices, which pushed up global and local prices, the exchange rate and import prices and led to higher construction materials’ prices.

“For the coming months, developments on the Middle East would determine global crude oil prices, inflation and interest rates that, in turn, would determine the trend in demand, new real estate or property, new supply or launches and take up by end-users or buyers or investors,” he said.

He said the government’s catch-up infrastructure spending is also expected to influence the demand and prices of construction materials in the coming months.