The wholesale prices of construction materials have spiked to its 10 year high because of rising cost of fuel, supply chain problems and the ongoing war in Ukraine.
With construction expected to generate more employment for those who lost their jobs in the pandemic, the sector is walking on tight rope now what with building materials reaching their 10-year high in the capital region of 8.3 percent from 6.9 percent in April and 2 percent last year.
The wholesale price index for construction materials leapt to these levels in May following the resumption of economic activities with the easing of quarantine restrictions, said the Philippine Statistics Authority.
The May index matched the rate in December 2011 and was the fastest since the 8.6 percent growth in November 2011. Bulk building prices have risen by 6.5 percent this year, faster than 2 percent a year before.
Economic reopening and the revival of construction activities might have boosted prices, Nicholas Antonio T. Mapa, senior economist at the ING Bank N.V. Manila Branch, told Business World.
“Supply chain issues and bottlenecks may have also led to the delay in the delivery of key equipment and materials from abroad, which in turn pushed up costs onshore,” he said.
“On the demand side, increased activity compared with last year will drive up prices as the economy remains relatively open.”
Fuel and lubricant prices jumped by 46.1 percent in May from 41.7 percent a month earlier. Reinforcing and structural steel prices increased by 15.7 percent from 11.2 percent in April.
Meanwhile, prices of galvanized iron sheets rose by 13.8 percent from 13.5 percent in April, while prices of PVC pipes increased by 10.3 percent from 3.8 percent. Prices of hardware (5.2 percent from 4.6 percent), painting works (5 percent from 4.7 percent), plywood (4.7 percent from 4.4 percent), lumber (4.2 percent from 3.8 percent), sand and gravel (3.8 percent from 2.7 percent), doors and jambs (2 percent from 1.9 percent) and glass (1.6 percent from 1.4 percent).
Bulk prices of tileworks inched up by 0.1 percent, a turnaround from a 0.4 percent decline in April.
The price increase in electrical works slowed to 8.6 percent in May from 9.5 percent in April, as did plumbing fixtures and accessories/waterworks (7.1 percent from 8 percent) and concrete products and cement (4.6 percent from 4.8 percent).
A sustained pickup in prices would probably continue for the rest of the year. Prices of construction materials may remain on the uptrend as both supply and demand side pressures extend into 2023,” he said.
“However, we see the possibility of a less pronounced demand side pressure as construction outlays slows down from the pace in the first half. Demand side pressures will stay the same or may even accelerate,” he added.
Tags: #constructionmaterials, #wholesaleprices, #easingofquarantinerestrictions, #economy