Wholesale price growth for building materials in Metro Manila slowed in December last year as restrictions on mobility were eased, according to data from the Philippine Statistics Authority (PSA).
The Wholesale Building Materials Price Index (CMWPI) for the National Capital Region (NCR) declined to 5.2% annually in December 2021, compared to 5.4% in November and 1% in December 2020.
This brought growth in building material prices in Metro Manila to an average of 3.2% last year, higher than 1.2% in 2020. This is the highest growth since growth of 4.7% in 2018.
Growth in December was mainly due to the slowdown in the rise in fuel and lubricant prices (to 26.6% year-on-year compared to 38.3% in November); sand and gravel (0.9% vs. 3%); Leaf IG (11.3% vs. 11.5%)); electrical works (7.1% against 7.2%); and PVC pipes (3.4% versus 3.8%).
On the other hand, the prices of the following product groups accelerated: paint (to 3.8% in December against 3.1% in November); computer hardware (3.1% vs. 2.6%); plywood (2.7% vs. 2.6%); and plumbing/water fixtures and fittings (2.7% vs. 1.8%).
At the same time, the prices of the following product groups maintained their growth: glass and glass products (14.4%); reinforcing and construction steel (8.8%); concrete and cement products (3%); lumber (2.8%); steel doors, jambs and frames (2.5%); and tiles (-1.8%).
“I believe that the easing of quarantine restrictions and the loosening of global supply chain channels have contributed significantly to the easing of wholesale prices for building materials in Metro Manila,” he said. said UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion in an email interview.
“Many companies and suppliers increased their inventories in the last quarter, and this was evident in the fourth quarter 2021 gross domestic product (GDP) growth,” Asuncion added.
Metro Manila was placed under a more relaxed Alert Level 2 from November to December as the number of coronavirus disease 2019 (COVID-19) cases declined.
Meanwhile, preliminary data released by the PSA showed GDP in the fourth quarter of 2021 accelerated by 7.7%. The GDP print was above the revised 6.9% in the third quarter of last year and a reversal from the 8.3% contraction in the last three months of 2020.
This brought last year’s growth to 5.6%, reversing the record decline of 9.6% in 2020.
Mr. Asuncion sees building material prices in Metro Manila declining in the near term amid the surge in the Omicron variant.
“I expect prices to continue to decline as restrictions recede in the economy due to the Omicron push. Barring any new surprise variant, wholesale building materials prices should continue to normalize throughout 2022,” he said.
The CMWPI index indicates large purchases by major construction companies and real estate developers and serves as a leading indicator of future activity in these industries. — Abigail Marie P. Yraola