Building cost inflation slowed dramatically to 3.1 percent in June 2026, down from 18.1 percent recorded in June 2025, signalling a period of relative price stability that could support infrastructure investment, property development and household construction projects.
According to the latest Prime Building Cost Index (PBCI) released by the Ghana Statistical Service, the sharp decline in annual inflation reflects a significant easing in cost pressures across the construction sector, although some categories continue to experience price increases.
Government Statistician, Dr. Alhassan Iddrisu, said the latest figures indicate that building costs are rising at a much slower pace than a year ago, providing greater certainty for investors and project planners.
“Building inflation has slowed sharply, from 18.1% in June 2025 to 3.1% in June 2026. Although it rose slightly from 2.7% in May, building costs are increasing far more slowly than a year ago, supporting better planning and investment,” he noted.
The report also showed that on a month-on-month basis, overall building costs declined by 0.1 percent between May and June 2026, suggesting that prices remained broadly stable despite persistent pressures in certain input categories.
Dr. Iddrisu explained that while some construction components experienced notable price increases, the overall market remained resilient.
“Month-on-month inflation tells us how prices changed over just one month, and June’s figures show that building costs were broadly stable despite pressures in some key inputs,” he said.
Construction materials continued to be the biggest source of inflationary pressure during the period.
The data showed that materials inflation increased to 3.9 percent and accounted for 96 percent of headline building inflation, underlining the sector’s heavy dependence on material costs.
Meanwhile, plant inflation accelerated sharply to 16.0 percent, indicating rising costs associated with equipment and machinery. In contrast, labour inflation fell further to -2.6 percent, helping to offset some of the upward pressure from materials and plant costs.
According to Dr. Iddrisu, developments in these components provide a clearer picture of where cost pressures are emerging within the construction value chain.
“Building inflation in June 2026 was driven mainly by construction materials. Materials inflation rose to 3.9% and accounted for 96% of headline inflation. Plant inflation accelerated sharply to 16.0%, while labour inflation declined further to -2.6%, helping to moderate overall building cost pressures,” he stated.
Electrical works lead inflation contributions
At the trade level, Electrical Works recorded the largest contribution to overall building inflation, followed by Metalwork, Glazing, Plumbing and Tiles.
Among the various sub-groups, Plumbing recorded the highest inflation rate of 23.9 percent, highlighting significant cost increases in that segment.
By contrast, Cement recorded the lowest inflation rate at -13.0 percent, indicating a substantial decline in prices compared to the same period last year.
“Looking beneath the headline helps us understand where cost pressures are building,” Dr. Iddrisu observed, emphasizing the importance of analysing sub-sector trends when planning construction projects.
The Government Statistician described the June figures as presenting a strategic opportunity for key stakeholders across the economy.
With inflation remaining relatively subdued in the construction sector, he said government could move ahead with critical infrastructure investments while costs remain manageable.
“The June figures present an opportunity for action. Government can accelerate priority infrastructure projects while inflation remains relatively low,” he said.
He also urged private sector firms to strengthen procurement strategies and lock in competitive contracts to protect against future price volatility.
For households, the slower pace of building cost increases could support more confident planning of residential construction and renovation projects, although material prices should continue to be monitored closely.
“Businesses should strengthen procurement planning and secure competitive contracts. Households can plan construction more confidently, while keeping a close watch on changing material prices,” Dr. Iddrisu added.
By: Christian Akorlie / businesspostonline
