The Government Statistician, Dr Alhassan Iddrisu, has said building cost inflation rose to 3.1 per cent in June 2026 as higher material and plant costs pushed up construction expenses, although the pace of increases remained significantly lower than levels recorded a year earlier.
The latest Prime Building Cost Index (PBCI) released by the Ghana Statistical Service (GSS) showed that annual building cost inflation increased from 2.7 per cent in May to 3.1 per cent in June.
However, 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.
The PBCI measures changes in the cost of key construction inputs, including materials, labour and plant, using 2023 as the base year. The index is used by developers, contractors, investors and policymakers to monitor cost movements and guide contract pricing and investment decisions.
Cost pressures
The June rate represented a major slowdown from the 18.1 per cent recorded in June 2025, continuing a decline in building cost inflation over the past year.
Since February 2026, annual building cost inflation had remained within a narrow range before the slight increase recorded in June, indicating relatively stable cost conditions in the construction sector.
Dr Iddrisu said the slowdown in inflation had provided a more predictable environment for construction planning and investment.
“Building inflation has slowed sharply, from 18.1 per cent in June 2025 to 3.1 per cent in June 2026.
Although it rose slightly from 2.7 per cent in May, building costs are increasing far more slowly than a year ago, supporting better planning and investment,” the Government Statistician, Dr Alhassan Iddrisu, said.
Material impact
Construction materials remained the biggest contributor to the increase in building cost inflation during the period.
The GSS said materials inflation increased to 3.9 per cent in June from 3.5 per cent in May and accounted for 96 per cent of the headline building inflation rate.
Plant inflation also recorded a sharp increase, rising to 16.0 per cent in June from 9.8 per cent in May, while labour inflation continued to decline, moving from negative 2.0 per cent to negative 2.6 per cent.
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.
Building inflation in June 2026 was driven mainly by construction materials. Plant inflation accelerated sharply to 16.0 per cent, while labour inflation declined further to negative 2.6 per cent, helping to moderate overall building cost pressures,” the Government Statistician, Dr Alhassan Iddrisu, said.
Input prices
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.
Cement recorded the lowest inflation rate at negative 13.0 per cent, while steel prices declined by 8.6 per cent during the period.
The GSS 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.
Electrical works recorded the largest contribution to the increase in the index, followed by metalwork, glazing, plumbing and tiles.
Fourteen of the 23 sub-groups recorded inflation rates above the national average of 3.1 per cent, showing that price pressures remained across several areas of construction despite the overall moderation.
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.
For households, the slower pace of cost increases could also provide some relief when planning building and renovation projects, although prices of some inputs, including plumbing materials and roofing sheets, remained elevated.
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.
Businesses should strengthen procurement planning and secure competitive contracts.
Households can plan construction more confidently while keeping a close watch on building material prices,” the Government Statistician, Dr Alhassan Iddrisu, 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.
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