CPPI rises to 50% in April but shows signs of easing

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The cost of construction materials and services in Ghana continued to rise in April, but there are signs that inflation may be starting to slowdown.

According to the Ghana Statistical Service, the Construction Producer Price Index (C-PPI) increased by 50.0 percent year-on-year in April (between April 2023 and April 2024), a decrease of 6.5 percentage points from the March 2024 rate.

This easing is a welcome change for the construction industry, which has been struggling with rising costs for some time. Yet the year-on-year inflation rate remains high. This means construction projects remain significantly more expensive than they were a year ago.

Sub-sectors of the construction industry

Per the C-PPI there were some variation between different sub-sectors of the construction industry. Civil engineering projects saw the highest year-on-year inflation rate at 74.0 percent, representing a decline of 11.9 percentage points from March. The construction of buildings sub-sector saw a more modest rise of 9.0 percent year-on-year, while specialised construction activities had the lowest rate at 5.5 percent.

The month-on-month change in the Construction Producer Price Index was also relatively low, at just 0.4 percent. However, the construction of buildings sub-sector saw the highest monthly inflation rate at 1.3 percent, followed by specialised construction activities at 0.4 percent. Civil engineering projects had the lowest monthly inflation rate at 0.1 percent.

While the construction industry continues to face inflationary pressures, the latest data suggests that the rate of increase may be starting to slow down. This could be a positive sign for the industry and the Ghanaian economy as a whole.

Ghana Producer Prices Rise 16.8 percent

Ghana’s producer inflation edged up in April, reaching a year-on-year increase of 16.8 percent. This represents a small rise from March’s rate of 15.3 percent.

While overall construction costs remain high, with a year-on-year increase of 50 percent, this actually reflects a slowdown from March’s 56.5 percent rate. Meanwhile, prices in the industry sector excluding construction continued to move up, hitting 20.2 percent inflation in April. The services sector also saw an uptick, with inflation rising to 9.4 percent.

Some industries are faring worse than others on the Producer inflation front. Construction, mining and quarrying, electricity and gas, and accommodation and food services all saw inflation rates above the national average. Water supply, sewerage and waste management recorded the lowest increase at 7.5 percent.

By Eben Agyekum-Boateng, 3Business