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UBOS report: Construction prices up

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UBOS report: Construction prices up

Overall construction inputs prices have risen since last year says Uganda Bureau of Statistics (UBOS). According to UBOS senior statistician, Dick Wanasolo Wadada, prices in the sector have been increasing gradually since the January 2017.

While releasing the recent construction sector indices last week at the UBOS headquarters in Kampala, Wadada said, “The 0.4% increase in average input prices for residential buildings, and 2.4% increase in civil works sub-sector, contributed to the annual price increase of 0.1%.”

According to UBOS, the annual prices for iron and steel increased by 8.3%; steel bars pipes increased by 15.04%; the wage rates increased by 1.92%; electrical wire and cable by 2.28%; Diesel and bitumen by 8.28% and 3.81%, respectively. This works out as a margin between 0.1% to 1.2% compared to last year’s rates.

Looking at the overall increase, Wadada says, high production costs and currency depreciation led to price increase in iron and steel, instability in the world market and scrap prices locally. “The election scandals in Kenya contributed much to prices fluctuations of scrap because all scrap from Uganda goes to yet they have been an environment of instability” added.

Also maintenance of the pipeline between Eldoret and Mombasa has led to price increase of both Diesel and bitumen however the price increase in electrical wires and cable prices went high because of the copper prices and local demand which is high.

Highlighting the price fluctuations in January 2018, the UBOS Executive Director, Ben Paul Mungyereza, reiterated, “The monthly changes in price inputs of the whole sector was 0.1% increase in both those building houses to live and houses to for business however prices for steel bars have exponentially gone higher.” Steel prices which are now regarded as black gold, due to excessive demand from Russia, China and Indian markets.

But the dealers in these construction materials differed with the official position as enunciated by the UBOS officials. Abdul Kasoma, a dealer in steel iron bars, along Entebbe Road, said steel prices have doubled and tripled for some time. Since the start of this year, they have experienced prices going higher some as much as four times.

Kasoma added that a half inch iron bar of 100 meters long, which was at UGX 230,000 it is now at 385,000; 20mm which was at UGX70, 000 is now at 100, 000. “This burden of price increase is felt by the last consumers, however also the Revenue Authority is hiking taxes and this has lead to some materials to double prices exponentially but this is because our local producers hikes prices and if we export they frustrate us. How can exported cement be of lesser price than the domestic one?” Kasoma wondered.

Robert Kawuma, a dealer in electrical wires and cables in Kiyembe, also puts this burden to Uganda Revenue Authority (URA) and Uganda National Bureau of Standards (UNBS). “This problem of price increase is brought by URA and UNBS because they have their common interests which we don’t know.

Copper prices are not high at international markets, but here in Uganda, taxes are high. Last December, a 10 mm twin cable of 100 meters long, was taxed at UGX 20,000, but in just few months taxes are at 120,000,” said Kasoma. This is more than 100%, which Kasoma said is excessive.

According to Kasoma domestic electrical wire manufacturers have little propensity to satisfy their domestic demand which has forced local suppliers to export more cable which has made them to face high taxes and transport costs due to oil prices.

However, according to Wadada, prices of cement have decreased a bit by 0.9% and lime dropped by 0.1%. This is because of new players, such as Simba Cement, which has come in despite the fact that Tororo Cement, the chief producer, is under renovation. “The Net Domestic Supply of cement decreased by 9.35%, cement production, imports and exports decreased, too,” said Wadada.

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