Retail prices of construction materials in NCR rise

MANILA, Philippines — Retail prices of selected construction materials in Metro Manila accelerated in January as price increases were seen in electrical, masonry and miscellaneous building materials, the Philippine Statistics Authority (PSA) reported yesterday.

The Construction Materials Retail Price Index (CMRPI) in the National Capital Region (NCR) rose 2.5 percent in January 2019 from 2.4 percent in December 2018 and two percent in January 2018.

PSA attributed this to the growth in the indices of electrical materials (1.4 percent), masonry materials (5.9 percent) and miscellaneous construction materials (2.3 percent).

The annual increase in the index of plumbing materials, meanwhile, slowed down to 0.9 percent. Other commodity groups retained their previous month’s annual rates in January 2019.

Growth in the CMRPI was slower month-on-month at 0.2 percent in January 2019 from 0.4 percent in December 2018.

Slower growth was seen for carpentry, electrical, masonry and miscellaneous construction materials. Specifically, slower price hikes month-on-month were seen for plywood, lumber, electrical wires, cement, gravel, sand, selected paints and corrugated galvanized iron sheets.

The CMRPI is a variant of the General Retail Price Index (GRPI) that measures the changes in the average retail prices of construction materials.

It covers 102 building materials classified into seven commodity groups: carpentry materials, electrical materials, masonry materials, painting materials and related compounds, plumbing materials, tinsmithry materials and miscellaneous construction materials.

Prices for the CMRPI are collected through actual price quotations from selected sample outlets in NCR.

The Asian Infrastructure Investment Bank (AIIB) reported late last month that building costs in the country are expected to rise further this year because of input demand for large-scale projects amid the government’s Build Build Build program.

Its Asian Infrastructure Finance 2019 report said market and structural factors conspire to push construction costs up further this year.

The China-led multilateral bank said construction costs are likely to increase because of the huge demand for materials. As building materials need to be imported, costing becomes vulnerable to the peso’s weakness against the dollar.

This drives up input prices and increase inflationary pressures.

Structural factors in the economy such as having a small labor market amid high demand for workers are also expected to contribute to high building costs.

As of 2018, the estimated cost for a four-lane, urban arterial road including traffic controlled intersections is P60,000 per meter.

AIIB said strong demand for construction materials and continued weakness of the peso weakness are expected to push this higher in 2019.