MANILA - Despite posting contractions for majority of the year, retail prices for construction materials in the National Capital Region (NCR), or Metro Manila, may start to go up not only due to the increase in reconstruction efforts but also base effects.

Retail prices of construction materials in the NCR continued to contract with 7.5% decline in September, according to the latest data released by the National Statistics Office (NSO).

University of Asia and the Pacific economist Dr. Victor Abola said the downward trend in retail prices of construction materials may hit a positive growth by the end of 2009 due to reconstruction efforts.

Abola said, however, that the increase in retail prices of construction materials will be largely due to base effects since the country had very low retail construction prices, especially in the last quarter of 2008.

He added that most manufacturer and construction-material suppliers may also be averse to increasing prices since the government is closely watching price increases these days.

“The growth may not be that significant and may not dampen the demand because the government is keeping a close eye on prices. But retail construction prices may likely be positive by the end of the year,” Abola said in a phone interview.

The NSO said retail prices of selected construction materials in NCR continued to register a negative rate at 7.5% in September. This was higher than the year-on-year contraction of 9.9% in August.

The construction-materials index moved at an annual rate of negative 34.6% from negative 42.7%. Price hike in the carpentry-materials index decelerated to 0.5% in September from 0.8% in August; masonry materials, 1.9% from 3.6%; painting materials and related compounds, 2.2 % from 3.8%; and plumbing materials, 1% from 1.9%.

“Annual price gains in the electrical and tinsmithry materials index were, however, correspondingly higher at 3.3% and 1.9% from 3.1% and 1.7%, respectively,” the NSO said.

Meanwhile, the month-on-month growth rate of the retail prices of selected construction materials in NCR went up at a slower pace of 0.3% in September from 0.4% in August.

The NSO said prices of carpentry materials decreased to negative 0.7% in September from 0.3% in August.

Further, the NSO said price increases in the electrical materials and masonry materials index eased to 0.9% and 0.2% from 2% and 0.3%, respectively.

Price increases in the tinsmithry and miscellaneous construction materials index were higher at 0.4% and 2.8%, respectively, from their corresponding last month’s rates of zero growth and 0.1%. However, prices of painting materials and related compounds remained stable with zero growth.

“Upward adjustments were observed in the prices of steel bars, machine bolts and nuts, GI rivet and washer. On the other hand, price reductions were seen in tanguile, plywood, plastic water closet fitting and GI pipes,” the NSO said.