WHOLESALE price growth of construction materials in Metro Manila accelerated in January to its highest level in two months, according to preliminary data from the Philippine Statistics Authority (PSA) released Monday.
The construction materials wholesale price index in the National Capital Region (NCR) rose 5.3% year on year, against the 5.2% logged in December and the 1.2% posted a year earlier.
The Januay reading was the highest since the 5.4% growth rate in November.
Economists said the pickup seen in January was due to construction activity resulting from the relaxation of movement restrictions in Metro Manila and surrounding areas to Alert Level 2 in November and December.
“Demand may have been further rising from 2021,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail.
“Note, however, that the slight increase month on month may have been due to the impact of Omicron which we think may have been largely shaken off (based on) more updated macroeconomic data,” he said.
Asian Institute of Management (AIM) economist John Paolo R. Rivera attributed the price increases to increased construction activity by both the private and public sectors.
“Condominium and commercial construction have been in full swing since restrictions were relaxed,” he said in a text message. “The Build, Build, Build has also been continuous as we end the Duterte term.”
Mr. Rivera also noted supply constraints due to the pandemic, which obstructed the seamless flow of construction materials.
According to the PSA, commodity groups that saw a pickup in wholesale price growth were GI sheets at 13%, up from December’s 11.3%; electrical works (8.5% from 7.1%); plumbing fixtures and accessories/waterworks (5.4% from 2.7%); painting works (4.2% from 3.4%); and PVC pipes (4.2% from 3.4%).
Growth also accelerated in the bulk prices of concrete products and cement (3.5% in January from 3% in December); plywood (3.1% from 2.7%); doors, jambs, and steel casements (2.9% from 2.5%); and sand and gravel (2.1% from 0.9%).
The wholesale price growth of lumber eased 2.5% in January from 2.8% the preceding month, while growth in reinforcing and structural steel prices slowed to 7% from 8.8%.
Tileworks prices retreated by 0.7%, after a 1.8% drop in December. Price growth in the remaining commodity groups was steady.
The government shifted the capital region as well as other areas to the stricter quarantine setting of Alert Level 3 in January to contain the surge in Omicron variant cases of the coronavirus. Quarantine returned to Alert Level 2 in February, moving to Alert Level 1 in March.
“This trend in construction prices may continue as demand for infrastructure continue to increase with the reopening of the economy and as supply constraints continue to persist,” Mr. Rivera said.
Mr. Asuncion said he he expects demand to continue to improve moving forward with the further reopening of the economy.
“However, we also see tightness in supply due to China’s lockdowns in March and April that may push prices upward as the economy tries to come out of the pandemic.” — Abigail Marie P. Yraola