Cement prices fell 14.5 percent year-on-year in May 2026, pointing to a rare easing in core construction input costs at a time when other parts of the building value chain continue to face upward pressure, according to the latest Prime Building Cost Index (PBCI).
The decline places structural materials, particularly cement and other base inputs, into a temporary cost relief phase for developers, even as overall construction inflation remains positive at 2.7 percent.
The data shows a clear split in construction economics. Cement recorded the sharpest decline among major sub-groups, while other structural inputs such as steel (-8.1 percent) and fine aggregates (-4.1 percent) also posted price reductions over the period. Skilled and unskilled labour costs similarly eased, declining by 1.7 percent and 2.6 percent respectively.
But that easing in foundational costs contrasts with rising prices in finishing and building systems. Plumbing recorded the highest inflation at 22.8 percent, followed by roofing sheets at 19.9 percent, glazing at 18.5 percent, and electrical works at 16.6 percent. Metalwork, ironmongery, and other finishing components also recorded double-digit increases.
The divergence points to a shift in construction inflation dynamics. While it is becoming relatively cheaper to raise the structural “skeleton” of buildings, the cost of completing and outfitting them continues to climb, pushing more of the inflation burden toward installation and finishing works.
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Overall, the Combined Prime Building Cost Index recorded a year-on-year inflation rate of 2.7 percent in May 2026. The figure reflects a period of stabilisation after a sharp easing from 18.1 percent in June 2025 to 4.4 percent in December 2025, before settling into a narrower range of 3.9 percent in January 2026, 2.4 percent in February, and 2.2 percent in both March and April.
On a monthly basis, the index rose 1.4 percent in May 2026, suggesting that while annual inflation has cooled compared to mid-2025 peaks, short-term price pressures are still present in the system.
Taken together, the data points to a construction cost environment shaped by easing structural input prices and rising finishing expenses.
Nonetheless, the data suggests a cost opportunity window for developers, with cement emerging as a key determinant of structural affordability in the current construction cycle.
