Construction prices ease as inflation slows down

Constructors are dealing with relatively stable prices of inputs used in construction.

Kampala

Prices in the construction sector recorded a fall of -1.1 for the year ending December 2012, statistics from Uganda Bureau of Statistics (Ubos) for the fourth quarter of 2012 show.

The drop came on the back of decreasing prices of inputs (mainly cement) used in residential, non-residential and civil buildings, meaning that people involved in construction paid relatively stable prices for construction inputs.

The fall in prices according to Mr William Anguyo, a senior statistician at Ubos, was also as a result of the slowing inflation. “Due to competition in the iron and steel sector, the prices of iron products went down save for those that are imported into the country which means that we also import the problems that come with them,” Mr Anguyo, said last week after the release of the Producer Price Index (PPI) for the period between September to December 2012.

At the end of February, Mr David Njoroge, the Hima cement general manager told this newspaper the prices of cement would continue falling as the main manufacturers (Hima and Tororo cement) had increased their production.

However, during the same time, the prices for services in hospitality industry rose by 2.7 per cent as a result of the increased festive activities in the fourth quarter of 2012 compared to 2011.

This was majorly due to a 3.4 per cent increase in prices of catering services as well as a 4.8 per cent increment in accommodation prices. Mr Anguyo said that the fluctuation of prices could imply that the profits in the manufacturing industry could also shrink which is not good for the economy.

akiyaga@ug.nationmedia.com