Retail prices of building items increase at faster pace in April

MANILA, Philippines — Retail prices of construction materials in Metro Manila moved up at a faster rate in April from the previous month, with most commodity groups posting higher increases, according to the Philippine Statistics Authority (PSA).

Data from the PSA showed the growth of the Construction Materials Retail Price Index (CMRPI) in the National Capital Region (NCR) went up to 1.2 percent in April from 0.6 percent in March.

The CMRPI growth in April, however, was slower than the 2.6 percent in the same month last year.

The PSA said the main driver to the uptrend of CMRPI in NCR was the increase in miscellaneous construction materials at 0.8 percent in April from the 1.5 percent drop in March.

This was followed by plumbing materials, which picked up by 0.3 percent in April from the previous month’s 0.2 percent decline.

“The pickup in retail construction prices would be consistent with the pickup in year-on-year headline inflation in April 2024, partly brought about by the more volatile global crude oil and other global commodity prices and higher US dollar or peso exchange rate during the month due to geopolitical risks in terms of higher tensions between Israel and Iran,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

Data released separately by the PSA showed the Construction Materials Wholesale Price Index (CMWPI) growth rate in NCR slowed down to 0.7 percent in April this year from 0.8 percent in March this year and 7.4 percent in April 2023.

The PSA said the slower growth rate of CMWPI was mainly due to the decline in plumbing fixtures and accessories or waterworks at 0.2 percent in April from 3.7 percent in March.

Also posting slower increments in April from the previous month are sand and gravel (1.2 percent from 1.3 percent); hardware (three percent from 3.4 percent); lumber ( 0.5 percent from 0.6 percent); metal products (0.7 percent from 0.8 percent); and painting works (1.9 percent from 2.3 percent).

Cement declined further to 2.5 percent in April from the 1.7 percent drop in the previous month, while tileworks recorded a 0.2 percent decline in April from a 0.1 percent increase in March.

Those with higher growth rates in April from the previous month are concrete products (0.6 percent from 0.5 percent); plywood (1.5 percent from 1.3 percent); electrical works (2.6 percent from 1.8 percent); PVC pipes (0.9 percent from 0.8 percent); and fuels and lubricants (10.9 percent from 8.7 percent).

Other commodity groups retained their respective March growth rates in April.

For the coming months, Ricafort said easing base or denominator effects could lead to some pickup in construction materials’ prices.

He also said possible rate cuts by the US Federal Reserve in the coming months, that could be matched locally, would 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.