Building cost inflation falls for 8th straight month

By Joshua Worlasi AMLANU

Building cost inflation slowed further in December 2025, extending a run of easing price pressures in the construction sector as materials and labour costs moderated, data from the Ghana Statistical Service have shown.

The Prime Building Cost Index rose to 131.0 in December from 125.5 a year earlier, translating to a year-on-year inflation rate of 4.4 percent. This compares with 5.9 percent in November and marks the eighth consecutive monthly decline. On a month-on-month basis prices fell by 0.2 percent, indicating a marginal easing in construction input costs at year-end.

The index tracks changes in the cost of building materials, labour and plant equipment across 406 items surveyed nationwide. It is used by developers, contractors and policymakers to guide budgeting, contract negotiations and inflation monitoring in the construction industry.

Dr. Alhassan Iddrisu, Government Statistician, said the latest figures point to improving cost conditions after sharp increases in 2024.

“The December 2025 outturn shows that building inflation has continued to slow, with prices of key inputs either stabilising or declining slightly. This suggests that the intense cost pressures seen earlier have eased, creating some room for households, businesses and government to plan construction activities more effectively,” he said.

Materials inflation eased sharply, with year-on-year growth slowing to 2.7 percent in December from 4.2 percent in November. On a monthly basis, material prices slipped by 0.1 percent. Cement, reinforcement and roofing sheets recorded negative annual inflation, helping to pull down overall costs, according to the data.

Labour costs remained elevated but also moderated. Year-on-year labour inflation slowed to 10.7 percent from 12.7 percent in November, while month-on-month prices declined by 0.9 percent. Both skilled and unskilled labour recorded slower annual increases, reflecting easing demand pressures and improved supply of workers.

Plant and equipment costs were the main source of upward pressure. Inflation in that category rose slightly to 5.6 percent year on year from 5.3 percent in November, with prices increasing 1.5 percent on the month. Equipment recorded the highest sub-group inflation at 14.9 percent, underscoring persistent cost pressures for machinery used in construction.

Despite the slowdown, officials cautioned against complacency. “While inflation is falling, labour costs remain relatively high and equipment prices are still rising. Addressing skills gaps through training and locking in medium-term contracts where possible will be important to sustain the gains we are seeing,”Dr. Iddrisu said.

The statistical service said this easing trend provides an opportunity for government to fast-track infrastructure projects and households to phase building work while cost pressures remain subdued.

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