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Philippines Economy News

NCR wholesale price growth of construction materials eases

ncr wholesale price growth of construction materials eases - NCR wholesale price growth of construction materials eases

GROWTH in wholesale prices of construction materials in Metro Manila slowed in June, the Philippine Statistics Authority said Monday.

The construction materials wholesale price index (CMWPI) in the National Capital Region (NCR) grew 1.2% year on year in June, against an increase of 1.3% in May.

The June reading was the lowest since December, when it also posted a gain of 1.2%.

The deceleration in the CMWPI was driven by the decline in plumbing fixtures and accessories/waterworks at 0.5% compared to May’s 0.8% growth. Contractions were also noted in the prices of fuels and lubricants (-10.5% from -21.3%) and plywood (-0.4% from -0.9%).

Also posting slower price growth were hardware (3.2% in June from 4.7% in May); galvanized iron sheets (1.5% from 2.8%); tileworks (16.5% from 17.5%); doors, jambs, and steel casements (0.1% from 0.4%); electrical works (0.9% from 1.1%); and polyvinyl chloride (PVC) pipes (6.8% from 7.5%).

The year-on-year growth in other commodities remained unchanged from the previous month: sand and gravel (1.3%); and glass and glass products (7.1%).

Meanwhile, price growth accelerated for concrete products and cement (0.8% from 0.7%); lumber (3.9% from 3.3%); reinforcing and structural sheets (0.4% from 0.3%); and painting works (0.9% from 0.7%).

Price growth was flat for asphalt and machinery and equipment.

“The decline in the wholesale price index for construction materials may reflect the poor demand for construction projects at this time given the pandemic,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

“As noted in (the second-quarter) gross domestic product (GDP), the gross value added (GVA) in construction was down by double digits from the same period last year due to restrictions in movement and the general slowdown in economic activity,” he added.

GDP declined 16.5% in the second quarter — the worst quarterly performance based on available government quarterly data dating back to 1981. Construction, in particular, declined by 33.5% year on year during the period.

“Given the dire outlook for construction and the economy as a whole, we expect wholesale prices for construction to remain on the downtrend for the next couple of quarters,” Mr. Mapa said. — Michelle Anne P. Soliman

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