According to preliminary data from the Philippine Statistics Authority (PSA) released on Monday, wholesale prices of construction materials in Metro Manila accelerated to a two-month high in January.
The wholesale price index for construction materials in the National Capital Region (NCR) rose 5.3% year-on-year, up from 5.2% in December and 1.2% a year earlier.
The January reading was the highest since a 5.4% growth rate in November.
Economists say the pickup seen in January was due to construction activity that led to a Level 2 alert in November and December as Metro Manila and surrounding areas relaxed traffic restrictions.
Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. “Demand is expected to grow further from 2021,” Asuncion said in an e-mail.
“Note, however, that the slight increase in the month may be due to the impact of Omicron which we think has largely stopped based on the more updated macroeconomic data,” he said.
Asian Institute of Management (AIM) economist John Paolo R. Rivera has blamed rising prices for rising construction activity in both the private and public sectors.
“Condominium and commercial construction have been in full swing since the ban was relaxed,” he said in a text message. “Build, build, build is also going on continuously as we are expiring in Duterte.”
Mr Rivera also cited supply constraints due to the epidemic, which hampered the smooth flow of construction materials.
According to the PSA, product groups that saw growth in wholesale prices had a GI sheet of 13%, up from 11.3% in December; Electrical work (7.1% to 8.5%); Plumbing fixtures and accessories / water works (2.7% to 5.4%); Painting work (3.4% to 4.2%); And PVC pipes (4.2% to 3.4%).
The rise in bulk prices of concrete products and cement has also accelerated (3.5% in January to 3% in December); Plywood (2.7% to 3.1%); Doors, jams and steel casings (2.5% to 2.9%); And sand and gravel (0.9% to 2.1%).
Wholesale wood prices rose 2.8% to 2.5% in January from the previous month, while reinforcement and structural steel prices rose 8.8% to 7%.
Tilework prices fell 0.7% after falling 1.8% in December. The remaining product group price increases were steady.
The government moved the Capital Region as well as other regions in January under strict quarantine setting of Warning Level 3 to augment the omnivorous variant of the coronavirus. Quarantine returns to alert level 2 in February, alert level goes to level 1 in March.
“This trend in construction prices is likely to continue as demand for infrastructure continues to increase and supply constraints continue as the economy recovers,” Mr Rivera said.
Mr Asansion said he hoped the economy would continue to improve as it reopened further.
“However, we also see tightening supplies due to the Chinese lockdown in March and April, which could push prices up as the economy tries to recover from the epidemic.” – Abigail Marie P. Iraola