THE wholesale price growth of construction materials in Metro Manila picked up in July, according to the Philippine Statistics Authority (PSA), likely reflecting the restart of major building projects after the easing of some quarantine restrictions.
The PSA said Tuesday that the construction materials wholesale price index (CMWPI) in the National Capital Region (NCR) grew 1.8% year on year in July, against a 1.2% rise in June and 3% in July 2019.
Wholesale prices reflect bulk purchases by building firms participating in major projects like infrastructure works. Retail prices reflect activity in smaller segments like the do-it-yourself (DIY) market.
Meanwhile, growth in the construction materials retail price index (CMRPI) eased to 1.1% in July, against 1.2% a month earlier and also in July 2019.
The acceleration in the CMWPI was driven by the price pickup in the following materials: tileworks (16.8% in July from 16.5% in June); lumber (4.4% from 3.9%); concrete products and cement (3.6% from 0.8%); hardware (3.6% from 3.2%); and electrical works (1.9% from 0.9%).
Slower price increases were noted in sand and gravel (1.1% from 1.3%); galvanized iron sheets (1.1% from 1.5%); painting works (0.5% from 0.9%); and PVC pipes (3.6% from 6.8%).
Commodities where price growth was unchanged from the previous month were glass and glass products (7.1%) and doors, jambs, and steel casement (0.1%).
Price growth in asphalt and machinery and equipment rental was flat.
Prices for plumbing fixtures and accessories/waterworks declined 0.4%, against a 0.5% decline a month earlier. Similar trends were noted for fuels and lubricants (-7.2% from -10.5%).
Plywood prices declined 0.7% from -0.4% previously while those for reinforcing and structural steel retreated 0.4% after a month-earlier gain of 0.4%.
At the retail level, slower growth in the CMRPI was driven by the following commodities: carpentry materials (0.8% from 1.1%); painting materials and related compounds (1.5% from 1.8%); and tinsmithry materials (1.2% from 1.4%).
Retail price growth accelerated for electrical materials (1% from 0.8%) and miscellaneous construction materials (1.1% from 0.9%).
Masonry and plumbing materials maintained their growth rates in July compared to June at 1.3% and 0.5%, respectively.
“The data shows a nascent turnaround in demand for materials after months of slowdown in construction activities due to the lockdown. However, the demand may mostly be coming from firms handling the infrastructure projects of the government, so there could be an unsteady gain in the index as some private activities slowly return,” said Security Bank Corp. Chief Economist Robert Dan J. Roces in an e-mail.
The economist added that construction activity may face higher overhead expenses as new protocols on testing and quarantine are implemented, while the launch of new projects may be delayed to next year.
In a separate e-mail, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said a quick rebound in construction activity is not likely with overall business activity expected to be subdued in the coming months due to reduced incomes.
“(This) could mean that current trends of relatively modest price movements will be present until a meaningful economic recovery is achieved,” Mr. Mapa said.
Metro Manila — along with the provinces of Cavite, Laguna, Rizal, and Bulacan — switched back to a relaxed form of lockdown starting Aug. 19 after reverting to strict quarantine for two weeks. — Michelle Anne P. Soliman
