Prices of building materials hit slowest growth in five years

MANILA, Philippines — The wholesale prices of building supplies in Metro Manila grew at their slowest pace in more than five years, according to the Philippine Statistics Authority (PSA).

In a report issued on Thursday, the PSA said the construction materials wholesale price index hit just 0.6 percent year-on-year in May, slower than the 0.7 percent growth in April. This was also slower compared to 6.6 percent in the same period last year.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp. attributed the sluggish growth to the high interest rate environment, which has curtailed demand for construction materials.

For the first five months, the index averaged 0.9 percent, lower than the 7.9 percent in the same period last year.

A slower growth in prices was also recorded in electrical works in May at 1.7 percent. This, compared to 2.6 percent in the previous month.

Hardware, on the other hand, grew 2.7 percent from 3 percent in April; plywood, 1.4 percent from 1.5 percent; and lumber, 0.4 percent from 0.5 percent.

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The wholesale prices for metal products were observed to have grown faster at 1 percent from 0.7 percent in the previous month.

“Possible cuts in US Fed and local interest rates later in 2024 and 2025 will lead to some pick up in economic activities including construction that could lead to some pick up in the demand and prices of construction materials,” Ricafort said in a Viber message.

The Fed kept US rates steady at the 5.25 to 5.50 percent range for the seventh time in a row during its June 11 to 12 policy meeting. The Bangko Sentral ng Pilipinas, meanwhile, also retained the 6.5-percent rate for the Philippines in May. —Mariedel Irish U. Catilogo