NEWS

By Bernadette Therese M. Gadon | Business World | January 28, 2022 7:05PM

THE PHILIPPINE Army’s 8th Infantry Division has mobilized more than 30 carpentry teams to help residents in different parts of the Visayas rebuild their houses damaged by typhoon Odette (international name: Rai), which swept through southern and central parts of the country in mid-December. — PHILIPPINE ARMY 8TH ID (Photo: Business World)

Retail price growth of construction materials in the National Capital Region (NCR) rose by the highest rate in more than three years in December, the Philippine Statistics Authority reported Friday, with analysts citing supply chain issues,

The Construction Materials Retail Price Index (CMRPI) in the NCR rose 2.7% year-on-year in December, from the 2.3% recorded in November and the year-earlier rise of 1.4%.

The December reading was the highest growth since the 2.8% posted in October 2018.

Retail construction prices reflect demand from small-scale building projects, such as those carried out by the do-it-yourself segment or small contractors. A separate wholesale indicator tracks the price movement in commodities likely purchased in bulk for major projects.

In 2021, construction retail price growth averaged 1.6% in 2021, against 1.2% in 2020. It was the highest since the 2.9% expansion in 2018.

Prices increased across the basket of goods, with prices of tinsmithry materials rising 3.8% in December, against November’s 2.4%.

Other commodity posting rises were carpentry materials (1.6% in December from 1.4% in November); electrical materials (2.5% from 2.2%); masonry materials (1.6% from 1.4%); painting materials and related compounds (2% from 1.9%); plumbing materials (3% from 2.9%); and miscellaneous construction materials (3.6% from 3.4%).

In an e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that supply chain issues particularly involving products from China pushed prices to surge in December.

“I have known of price increases due to higher prices of inputs because of the supply chain bottlenecks even before the pandemic (only to be further aggravated by [coronavirus disease 2019]),” he said.

For 2021, Mr. Asuncion noted that price movements were mainly driven by the pandemic and the lockdowns imposed throughout the year.

In the first half of 2021, the NCR started relaxing its movement restrictions, as case counts started falling and vaccination rates rose. However, the discovery of other variants prompted the government to tighten restrictions once again to minimize the impact of the pandemic on the economy.

“As (COVID-19) cases decline from the Omicron surge, I think that ‘sabik‘ (revenge) spending may resume, particularly discretionary spending,” he said.

Mr. Asuncion sees a “normalization” of construction prices this year as demand returns to pre-pandemic levels.

“Barring any new variants, global oil price risks due to geo-political and supply issues, further aggravation of supply chain challenges, and any political uncertainties from the transition of power to the new administration, 2022 construction prices should start to stabilize,” he said.

Source: Business World