Inflation rate to challenge construction sector growth
The unforeseen challenges caused by the global coronavirus (COVID-19) pandemic resulted in delays and cancellations of construction projects, both private and public. Local construction companies and contractors identified the difficulty of closing projects as a major challenge, as supply chain and employment were disrupted. As restrictions were eased and businesses resumed operations, construction projects also slowly recovered. In particular, the number of constructions from approved non-residential building permits has shown growth, even surpassing pre-pandemic figures. This was seen to have been influenced by the growing demand for more office spaces, especially since the work-from-home setup has been limited, alongside commercial buildings such as malls and hotels. Meanwhile, construction from approved residential building permits also recovered but has remained lower than the number of constructions in 2019.Despite this, several factors were seen to challenge the development of the construction sector in the Philippines. Among those include supply chain disruptions that will raise the prices of construction materials. As of the first quarter of 2023, preliminary figures indicated that the average cost per square meter of residential construction amounted to 10,500 Philippine pesos, while non-residential construction was at 11,340 Philippine pesos. In Metro Manila alone, the wholesale price index of construction materials grew by over eight percent in 2022, with machinery and equipment rental having the highest price index. The retail price index of construction materials also increased by about six percent in the same year, especially for miscellaneous materials.
