Building Costs Soar: 3.1% Inflation Hits Accra's Construction Scene
The Government Statistician, Dr Alhassan Iddrisu, has announced a 3.1 per cent building cost inflation rate in June 2026, driven mainly by higher material and plant costs. This rate is significantly lower than the 18.1 per cent recorded in June 2025, marking a sharp decline in building cost inflation over the past year.
Cost Pressures Ease
According to the Prime Building Cost Index (PBCI) released by the Ghana Statistical Service (GSS), construction costs eased during the month, with the month-on-month inflation rate declining by 0.1 per cent in June from 1.4 per cent in May. This slowdown in inflation has provided a more predictable environment for construction planning and investment.
The GSS said the slowdown in inflation had given stakeholders a more stable cost environment, allowing them to plan projects with greater confidence. Dr Iddrisu noted that building inflation has slowed sharply, from 18.1 per cent in June 2025 to 3.1 per cent in June 2026.
Material Impact Felt
Construction materials remained the biggest contributor to the increase in building cost inflation during the period, accounting for 96 per cent of the headline building inflation rate. The GSS said materials inflation increased to 3.9 per cent in June from 3.5 per cent in May. Among the 23 sub-groups tracked under the PBCI, plumbing recorded the highest annual inflation rate at 23.9 per cent, followed by roofing sheets at 21.4 per cent and small tools at 19.7 per cent.
Input Prices Under the Spotlight
The movement in the three major components showed that while material and equipment costs continued to put pressure on construction expenses, lower labour costs helped to reduce the overall impact. Dr Iddrisu said the fall in cement and steel prices made the biggest negative contribution to building cost inflation and helped to limit the overall increase in construction costs. Cement recorded the lowest inflation rate at negative 13.0 per cent, while steel prices declined by 8.6 per cent during the period.
Outlook for Stakeholders
The lower inflation environment could support better budgeting for developers, contractors, and businesses undertaking construction projects, as costs become easier to forecast compared with the previous year. Dr Iddrisu said the current cost environment provided an opportunity for stakeholders to plan projects while monitoring movements in key inputs. "The June figures present an opportunity for action. Government can accelerate priority infrastructure projects while inflation remains relatively low," he said.
The latest PBCI figures showed that while construction costs continued to rise annually, the pace of growth had slowed considerably compared with 2025. Lower labour costs and declining prices for cement and steel helped to contain overall inflation, although higher plant costs and selected material prices remained areas of concern for construction businesses.
Source: Joy Online
