The wholesale price of construction materials in the National Capital Region (NCR) rose 1.6% in March, the Philippine Statistics Authority (PSA) said.
The construction materials wholesale price index (CMWPI) rose 1.6% year on year in March, compared to a rise of 1.5% in February.
Growth in the retail-level index, known as the construction materials retail price index (CMRPI), slowed to 0.9% in March, after coming in at 1.1% in February.
The acceleration in CMWPI growth was driven by upticks in concrete products and cement (1.3% from 0.6% in February) and reinforcing and structural steel (0.3% from 0.2%). The prices of doors, jambs, and steel casements rose 0.7% in March, a reversal from February when it declined 0.7% year on year.
Commodities where price growth rose at a slower pace in March compared with February were galvanized iron sheets (2.8% from 4%); sand and gravel (1.4% from 2.5%); electrical works (1.4% from 2%); hardware (4.7% from 5.3%); plumbing fixtures and accessories/waterworks (1.4% from 1.9%); lumber (3.3% from 3.8%); and painting works (0.9% from 1.1%).
Tileworks prices grew 17.5% while prices of glass and glass products rose 7.1% and those of PVC pipes rose 7.5%, while asphalt and machinery and equipment rental prices were flat.
Price declines accelerated in plywood (minus 0.4% from minus 0.1%) and fuels and lubricants (minus 5.7% from minus 0.7%).
Meanwhile, the year-on-year slowdown in the CMRPI in March was led by miscellaneous construction materials (0.5% from 0.8%); tinsmithry materials (1% from 1.3%); plumbing materials (0.7% from 0.9%); and painting materials and related compounds (1.6% from 1.7%).
The increase in retail prices accelerated for carpentry materials (1.3% from 1%); masonry materials (0.7% from 0.5%); and electrical materials (0.7% from 0.6%).
“The increase in wholesale prices of construction materials… can be due to increases in big-ticket construction developments over retail-type construction; hence, the slower movement in retail prices of construction,” John Paolo R. Rivera, associate director at the Asian Institute of Management, said in an e-mail.
However, Mr. Rivera found the data “puzzling,” and speculated why March prices rose when NCR was on extended community quarantine (ECQ) for half of the month.
“Is the BBB (Build, Build, Build ) program still on-going despite ECQ? I don’t think so. Or, is this a delayed reaction of wholesale prices to the previous movement in demand prior to ECQ? It might be. Or, is this reflective of the ‘construction’ efforts to refit certain facilities to augment COVID-19 (coronavirus disease 2019) response? It’s possible,” he said.
Luzon was placed under ECQ in mid-March to prevent the further spread of COVID-19. The lockdown was supposed to end on April 12 but was extended to April 30 as reported COVID-19 cases in the country showed no signs of slowing.
“Inflation is also slowing down from January to March due to decreasing oil prices… and slower economic activities due to ECQ. Given this movement, I expect both wholesale and retail prices to slow or go down assuming the government and private sector is halting huge construction projects and most resources are allocated to COVID-19 response,” Mr. Rivera said, adding that construction activities may be limited to refitting certain facilities.
Due to congestion in hospitals, the government has started to convert buildings into quarantine facilities. Among these include the Rizal Memorial Sports Complex, the Philippine International Convention Center and the World Trade Center.
SOURCE: Business World