Ghana building cost inflation rises to 3.1% as material prices increase

Building cost inflation in Ghana rose to 3.1 per cent in June 2026, driven mainly by higher prices for construction materials and plant, although the rate remained well below the level recorded a year earlier.

The latest Prime Building Cost Index (PBCI), published by the Ghana Statistical Service (GSS), showed that annual inflation increased from 2.7 per cent in May to 3.1 per cent in June.

Despite the annual rise, construction costs eased on a monthly basis. Month-on-month inflation fell by 0.1 per cent in June, compared with 1.4 per cent in May.

The PBCI tracks changes in the prices of key construction inputs, including materials, labour and plant, with 2023 used as the base year. The index is used by developers, contractors, investors and policymakers to monitor costs and inform contract pricing and investment decisions.

June’s figure represented a substantial slowdown from the 18.1 per cent recorded in June 2025, extending the broad decline in building cost inflation over the past year.

Annual inflation had remained within a relatively narrow range since February 2026 before the modest increase in June, pointing to generally stable conditions across the construction sector.

Government Statistician Dr Alhassan Iddrisu said the lower rate had created a more predictable setting 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.

Materials were the largest contributor to the increase recorded in June.

According to the GSS, materials inflation rose to 3.9 per cent from 3.5 per cent in May and accounted for 96 per cent of the headline building inflation rate.

Plant inflation also accelerated sharply, reaching 16.0 per cent in June compared with 9.8 per cent in May. Labour inflation moved in the opposite direction, falling from negative 2.0 per cent to negative 2.6 per cent.

The figures for the three main components indicated that rising material and equipment costs continued to add pressure to construction expenses, while lower labour costs helped moderate the overall increase.

“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.

Among the 23 sub-groups monitored through the PBCI, plumbing registered the highest annual inflation rate at 23.9 per cent. It was followed by roofing sheets at 21.4 per cent and small tools at 19.7 per cent.

Cement recorded the lowest rate, at negative 13.0 per cent, while steel prices fell by 8.6 per cent during the period.

The GSS said lower cement and steel prices made the largest negative contribution to building cost inflation, helping to restrain the overall rise in construction expenses.

Electrical works made the biggest contribution to the increase in the index, followed by metalwork, glazing, plumbing and tiles.

Inflation was above the national average of 3.1 per cent in 14 of the 23 sub-groups, indicating that price pressures remained significant in several parts of the construction industry despite the overall slowdown.

The more moderate inflation environment could make it easier for developers, contractors and businesses to prepare budgets, with costs now more predictable than they were a year earlier.

Households planning construction or renovation work could also benefit from the slower pace of price increases. However, some inputs, including plumbing materials and roofing sheets, continued to record high inflation.

Dr Iddrisu said stakeholders should use the current conditions to plan projects while continuing to monitor changes in major construction 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 show that construction costs are still rising annually, but at a considerably slower rate than in 2025.

Lower labour costs and falling cement and steel prices helped contain inflation in June, although plant costs and selected building materials remained important concerns for construction businesses.