Wholesale price growth of construction materials in Metro Manila declined to a nearly 16-year low in August, due to faster declines and slower increases recorded across most commodity groups, the Philippine Statistics Authority (PSA) said in a report.
Meanwhile, retail price growth rose, driven by the increase in the index of carpentry, the statistics agency said.
Based on preliminary data, the PSA showed that year-on-year growth of the construction materials wholesale price index (CMWPI) in the National capital region (NCR) fell 0.5% in August, steeper than the 0.3% drop in July.
This was a reversal of the 0.5% growth posted a year ago.
The latest reading was the weakest pace in almost 16 years, since the 1.9% drop in October 2009.
Year to date, August CMWPI growth averaged 0.1%, lower than the 0.8% average growth a year earlier.
The PSA attributed the contraction to the prices of electrical works (-0.5% in August from 0.3% in July), while slower increases were observed in G.I. sheet (0.7% from 1.3%), and plumbing fixtures and accessories or waterworks (0.4% from 0.5%).
Additionally, steeper declines were observed in cement (-1.3% from -1.2%), reinforcing steel (-1.3% from -0.7%), and fuels and lubricants (-3.2% from -3%).
On the other hand, price growth of tileworks accelerated to 1.5% from 1.2%, while doors, jambs, and steel casement grew to 0.6% from 0.5%, and PVC pipes accelerated and 0.3% from 0.1%.
Reinielle Matt M. Erece, economist at Oikonomia Advisory & Research, Inc., attributed the decline to sluggish construction activity.
“The slowdown may be caused by typhoons, which halt some activities, and a downturn in investments, as global investor pessimism and local issues weigh on investments,” he said in an email.
In August the Philippines experienced three typhoons, tropical cyclone Gorio (international name: Podul), typhoon Isang (Kajiki), and tropical depression Huaning.
RETAIL PRICE GROWTH PICKS UP
In a separate report by the PSA, the construction materials retail price index (CMRPI) inched up 1.1% in August, from 1% in July. A year earlier, it had the same growth rate.
The August CMRPI outcome was the fastest pace in five months or since the 1.2% in March.
In the eight months to August, CMRPI in NCR averaged 1.1%, similar with its average growth last year.
The CMRPI is based on 2012 constant prices, while the CMWPI is based on 2018 constant prices.
The acceleration in retail building materials price was driven by carpentry materials, whose price growth increased 0.3% in August from flat growth in July.
Stronger growth was also recorded in masonry materials (1.5% in August from 1.3% in July), tinsmithry materials (1.8% from 1.7%), and miscellaneous construction materials (0.4% from 0.2%).
Meanwhile, slower growth was observed in electrical materials (1.9% from 2%), painting materials and related compounds (2.1% from 2.3%), and plumbing materials (0.4% from 0.5%).
Mr. Erece said that demand for construction materials may continue to weaken this year, as major infrastructure projects undergo adjustments aimed at enhancing transparency following recent corruption scandals. — Heather Caitlin P. Mañago