NCR construction material prices rise at slower pace in February

WHOLESALE PRICES of building materials in the Metro Manila rose at the slowest annual pace in six months in February, preliminary data from the Philippine Statistics Authority (PSA) reported on Wednesday. 

PSA data showed the construction materials wholesale price index (CMWPI) in the National Capital Region (NCR) eased to 9.1% in February, from 9.4% in January.

This was the slowest rise in bulk construction material prices in six months or since the 7% in August last year.

However, February growth in CMWPI was faster than the 5.2% in the same month in 2022.

Year to date, bulk construction prices grew by 9.2%, higher than the 6.5% in the same period in 2022.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the latest CMWPI data coincide with the recent weakness in construction jobs. 

“On a quarter-on-quarter basis (October 2022 vs. January 2023 round), a total of 557,000 construction jobs were shed,” he said in an e-mail.

Construction was among the top five subsectors with the biggest decline in the number of employed persons from October 2022 to January 2023, along with fishing and aquaculture (down 54,000 jobs), agriculture and forestry (38,000), mining and quarrying (20,000) and financial and insurance activities (7,000).

“This may be the direct impact of the sluggish recovery of investor sentiment due to the prevailing macroeconomic risks, such as higher inflation, higher interest rates, and the threat of softer demand due to offshore recession risks,” Mr. Asuncion said.

Inflation accelerated to a 14-year high of 8.7% in January, from 8.1% in December.

The PSA attributed the lower annual growth in CMWPI to the “downtrend in the heavily weighted reinforcing and structural steel at 10% in February 2023 from 11.4% in January 2023.”

PSA data also showed slower growth in the prices of fuels and lubricants (1.4% in February from 6.4% in January), glass and glass products (0.2% from 1.6%), tileworks (4.2% from 5.1%), plywood (5.2% from 5.8%) and painting works (11.6% from 11.7%). 

On the other hand, six commodity groups posted higher annual price growth, led by concrete products and cement (10.9% in February from 10.2% in January), electrical works (8% from 7.9%), sand and gravel as well as doors, jambs, and steel casement (5.8% from 5.7%), plumbing fixtures and accessories/ waterworks (3.9% from 2.1%) and PVC pipes (2% from 1.8%). 

Growth in bulk prices for other commodity groups, such as galvanized iron sheet (14.5%), lumber (7.4%), and hardware (7.1%), were unchanged.

“We’re starting to see the slowdown and the consequent impact on joblessness in the industry. Thus, it is safe to expect lackluster growth in the next month, and for the year, softer overall growth,” Mr. Asuncion said. 

The unemployment rate rose to a four-month high of 4.8% in January, from 4.3% in December. This is equivalent to 2.37 million jobless Filipinos in January, higher than 2.22 million in December.

Job losses in January were seen in agriculture and forestry (down 1.113 million); wholesale and retail trade, repair of motor vehicles and motor vehicles and motorcycles (down 375,000); and construction (down 288,000). — A.M.P.Yraola