NCR construction material price growth eases in March

MANILA, Philippines — Retail prices of construction materials in Metro Manila went up at its slowest pace in more than four years in March, according to the Philippine Statistics Authority.

Data released by the PSA yesterday showed the Construction Materials Retail Price Index (CMRPI) in the National Capital Region (NCR) continued to pick up at a slower rate of 0.6 percent in March from 1.1 percent in February. It was also slower than the 4.1-percent increase recorded in March 2023.

The March CMRPI growth is the lowest posted since the 0.1 percent uptick in December 2019.

“The relatively slower pace of the year-on-year increase in construction materials in Metro Manila may have to do with higher base or denominator effects, as well as relatively lower global crude oil prices lingering among two-year lows recently (since January 2022) and also lower global commodity prices due to the sharp increase in Fed and other global central bank policy rates that led to risk of recession in other developed countries and effectively slowed down global trade, investments and also the demand for construction materials,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

Ricafort said the relatively steady to slightly stronger peso exchange rate against the US dollar last month also helped ease the prices or costs of some imported construction materials.

The PSA said the primary driver of the slower increase of CMRPI in NCR was the lower increment in the heavily-weighted tinsmithry materials index at 2.4 percent in March from 3.1 percent in the previous month.

Also cited as drivers of the lower CMRPI growth in March were the slower increments in electrical materials at 0.9 percent from the previous month’s one percent and painting materials and related compounds at two percent from 2.1 percent in February.

The PSA said masonry materials led the declines with 0.2 percent in March from a 0.4-percent hike in February and plumbing materials with a 0.2 percent decline from a 0.3-percent increase.

Miscellaneous construction materials registered a faster contraction of 1.5 percent in March from the one-percent drop in February.

Meanwhile, carpentry materials had a slightly higher growth rate of 0.2 percent in March from the previous month’s 0.1 percent.

Average CMRPI growth in NCR in the January to March period was at 1.1 percent.

“For the coming months, easing base or denominator effects could mathematically lead to some healthy pick up in construction materials prices,” Ricafort said.

He said the possible rate cuts by the US Federal Reserve in the coming months, which could be matched locally, may reduce borrowing or financing costs that could lead to some increase in demand for global trade, investments and loans, including those for construction and other infrastructure projects.

He added that geopolitical risks, especially the increased tensions in the Middle East could lead to higher volatility in global crude oil and other commodity prices, including those related to construction materials and such could lead to some pick up in prices.