Wholesale price growth for building 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 on Monday.
The National Capital Region (NCR) wholesale building materials price index rose 5.3% year on year, from 5.2% in December and 1.2% posted a year earlier .
January’s reading was the highest since November’s 5.4% growth rate.
Economists said the recovery seen in January was driven by construction activity resulting from the easing of movement restrictions in Metro Manila and surrounding areas to Alert Level 2 in November and December.
“Demand may have increased further from 2021,” UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said in an email.
“Note, however, that the slight month-over-month increase may be due to the impact of Omicron which we believe may have been largely shaken (based on) more up-to-date macro data. day,” he said.
Asian Institute of Management (AIM) economist John Paolo R. Rivera attributed the price increases to increased private and public sector construction activity.
“The construction of condominiums and businesses has been in full swing since the restrictions were relaxed,” he said in a text message. “The Build, Build, Build has also been continuous as we complete Duterte’s tenure.”
Rivera also noted supply constraints due to the pandemic, which have hampered the continued flow of building materials.
According to the PSA, the commodity groups that saw a pickup in wholesale price growth were GI sheets at 13%, up from 11.3% in December; electrical work (8.5% against 7.1%); plumbing/aqueduct fixtures and fittings (5.4% versus 2.7%); painting work (4.2% against 3.4%); and PVC pipes (4.2% versus 3.4%).
Growth also accelerated in wholesale prices for concrete products and cement (3.5% in January against 3% in December); plywood (3.1% versus 2.7%); steel doors, jambs and leaves (2.9% versus 2.5%); and sand and gravel (2.1% versus 0.9%).
Growth in wholesale lumber prices slowed to 2.5% in January from 2.8% the previous month, while growth in prices for reinforcing and structural steel slowed to 7 %, against 8.8%.
Tile prices fell 0.7%, after falling 1.8% in December. The price growth of the other product groups was constant.
The government moved the capital region along with other areas to the stricter Alert Level 3 quarantine setting in January to contain the surge in cases of Omicron variants of the coronavirus. The quarantine returned to Alert Level 2 in February, moving to Alert Level 1 in March.
“This construction price trend could continue as demand for infrastructure continues to increase as the economy reopens and supply constraints persist,” Rivera said.
Asuncion said he expects demand to continue to improve as the economy continues to reopen.
“However, we are also seeing tighter supply due to China’s lockdowns in March and April, which could push prices higher as the economy tries to emerge from the pandemic.” — Abigail Marie P. Yraola