Ghana building inflation hits 3.1% on soaring equipment costs

Building inflation in Ghana climbed to 3.1% in June 2026, a rise from 2.7% in May, largely propelled by escalating plant and equipment expenses, according to the Ghana Statistical Service (GSS). The latest Prime Building Cost Index (PBCI) revealed that despite an annual increase in construction costs, a slight month-on-month easing provided some respite for developers and contractors. Government Statistician Dr. Alhassan Iddrisu presented the June 2026 figures, noting the index stood at 137.9, a marginal decrease from May's 138.0, indicating a 0.1% monthly decline in overall building costs. The year-on-year inflation rate reflects changes in the cost of key construction inputs, materials, labor, and equipment, over the 12 months leading up to June 2026. Materials accounted for the largest portion of the overall building inflation, contributing 3.9% annually and making up 76.5% of the PBCI basket. However, plant and equipment costs experienced the most significant surge, increasing by 16.0% year-on-year, a sharp jump from May's 9.8%, despite constituting only 4% of the basket. The GSS highlighted this surge as a key emerging risk for the construction sector. In contrast, labor costs decreased by 2.6% compared to June of the previous year, helping to moderate the headline inflation rate. Skilled labor costs fell by 1.2%, while unskilled labor saw a more substantial drop of 4.9%. At the sub-group level, plumbing led with the highest annual inflation at 23.9%, followed by roofing sheets (21.4%), reinforcement (18.1%), glazing (17.9%), and electrical works (17.4%). Conversely, prices for cement, steel, fine aggregate, and timber decreased over the period. The GSS offered guidance to stakeholders, advising households to review budgets and compare quotes for construction projects, considering phased construction if necessary. Businesses were urged to price contracts according to market conditions, manage exposure to high-cost equipment and materials, and adopt flexible procurement with transparent price-adjustment clauses. For the government, the Service recommended leveraging the current low inflation environment to accelerate public infrastructure projects while closely monitoring rising plant and installation costs. Additionally, it called for increased investment in artisan skills development, improved procurement data systems, and enhanced local supply chains.

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The latest Prime Building Cost Index (PBCI) showed that although the annual cost of construction increased compared to the same period last year, prices eased slightly on a month-on-month basis, offering some relief to developers and contractors.