New report indicates increase in cost of construction

By Edwin Muhumuza

Prices for inputs into the construction sector increased by 3.1% in October compared to 2.5% in September. The increase was driven by increases in in-put  prices into the buildings sub sector and civil works subsector. Specifically increments have been recorded in wage rates due to increase in cost of living, paint, roofing sheets, diesel and bitumen.

This was revealed by the Uganda Bureau of Statistics (UBOS) during the presentation of the  annual construction sector indices report that details changes in prices of inputs such as construction materials, labor and equipment.

Shockingly, inputs that registered price decreases include; cement ,  iron and steel.  Aliziki K. Lubega, principal statistician at Uganda Bureau of Statistics notes that Cement quantities are a proxy to the volume of construction in the economy which  recorded a reduction of 2.8% due to increased supply in the market. Additionally, lime decreased by 2.1%.

Prices of cement have been reducing since mid this year began due to increased production.Net Domestic supply increased by 1.64% in September compared to August 2018 due to increase in local production, that was also reflected in a rise in cement exports as well as a decrease in cement imports.

Domestically , at retail price the cost of a cement bag is at approximately shs.31000 to 29000, depending on where you chose to buy and a bit lower at whole sale price.This amidst concerns from some stakeholders ,accusing  Indians of having monopoly in the cement industry and hence use that advantage to discriminate in the distribution of cement.

The implication of the increase in overall annual prices for inputs into the construction sector is that on average one had to pay 3.1% higher for the same inputs in September 2018 than at the same period of the year last year.

Producer Prices for Manufacturing and Utilities.

The  producer prices for Manufactured goods and Utilities decreased by 1.7% in September compared to the 2.3% decrease in August due to a decrease in prices of manufactured products. Annually producer prices for manufactured goods decreased by 2.1 % in September compared to 3.0% in August as a result of a decrease in prices of food products, non-metallic mineral products, beverage prices, Leather and related products.

Other notable price increments were for manufactured goods produced for domestic consumption as well as for export which was attributed to rise in prices for food products, Tobacco, Chemicals, Beverages and pharmaceuticals.

On Utilities, the producer prices for them increased by 0.4% in September compared to 2.4% in the previous month due to the increase in prices of electricity power generation.