The Ghana Statistical Service (GSS) has released its latest Construction Producer Price Index (C-PPI) report for February 2025, revealing a significant drop in annual inflation across the construction industry. The report shows that the overall year-on-year inflation rate fell to 15.8 percent in February from 29.8 percent in January, reflecting notable easing in producer price pressures in the sector.
The C-PPI, which measures changes in the prices received by domestic producers for goods and services in the construction sub-sector, uses the March 2020 – February 2021 period as its base. According to the provisional data, overall monthly change in the index was recorded at 1.0 percent.
Breaking down the figures, the construction of buildings recorded an index level of 312.3, with a month-on-month increase of 2.1 percent and an annual inflation rate of 15.9 percent. Meanwhile, the civil engineering sub-sector, with an index level of 197.3, experienced a lower annual inflation rate of 15.7 percent. Notably, within this segment, utility projects saw the highest inflation at 49.6 percent, while the inflation rate for roads and railways declined sharply by 21.4 percentage points to 15.9 percent.
In the specialized construction activities sub-sector, the index level stood at 150.4, marking the highest annual inflation rate at 18.5 percent. Further details reveal that the inflation rate for building completion and finishing activities dropped by 0.6 percentage points to 12.6 percent. Other specialized construction activities decreased by 3.0 percentage points, and electrical, plumbing, and installation services recorded a slight reduction to 18.2 percent.
The GSS has emphasized that while the February 2025 C-PPI figures are provisional, all other indicators in the release are final.
The easing of inflation pressures in the construction sector brings however both opportunities and challenges for businesses;
Lower inflation means that cost increases for materials and services are moderating, helping companies forecast and manage expenses more reliablya also more predictable pricing can improve contract negotiations and budgeting, potentially boosting profit margins if cost pressures continue to ease.
However, the variation in inflation across sub-sectors, where, for instance, building construction still faces relatively high inflation compared to civil engineering, means that businesses need tailored strategies. Firms in segments with higher inflation may still face significant cost challenges and must adjust pricing, manage supply chains, and possibly renegotiate contracts to safeguard margins. While the overall drop in inflation from 29.8 percent in January to 15.8 percent in February offers a more stable economic environment, businesses must remain agile to address the uneven cost pressures across different construction activities.
