Building cost inflation in Ghana climbed to 4.6 percent in August 2026, up from 4.0 percent in July, as rising plant and equipment costs and selected construction materials outweighed sharp declines in cement, steel and labour prices, the Ghana Statistical Service said on Wednesday.
The latest Prime Building Cost Index (PBCI) showed building input prices rose 0.1 percent between July and August. The index stood at 138.4 in August 2026, compared with 132.3 a year earlier, while the annual average building cost inflation for the 12 months to August 2026 was 4.3 percent.
Although the monthly rate edged up, the August figure was well below the 12.0 percent recorded in August 2025, “pointing to a substantial moderation in construction cost pressures over the past year,” the GSS said. The rate also remained slightly below consumer inflation, which stood at 5.0 percent in August 2026.
The PBCI, rebased in 2025 to use 2023 as its reference year, tracks 406 construction items across 23 sub-groups, covering materials, labour and plant or equipment. It is used by investors, developers, contractors and policymakers to negotiate contracts, adjust bids, budget and monitor building-sector inflation.
Materials remained the biggest contributor to the headline rate, recording 5.8 percent year-on-year inflation, up from 5.1 percent in July. The category accounts for 76.5 percent of the PBCI basket and contributed 96.5 percent of the upward pressure on the headline rate.
But the GSS identified plant and equipment as an emerging risk, with inflation in the category reaching 17.9 percent in August, down only marginally from 18.0 percent in July. Although plant and equipment make up just 4.0 percent of the basket, they contributed 15.6 percent to the headline inflation rate. The increase was driven partly by higher costs for equipment, which recorded inflation of 10.7 percent, and small tools, which surged by 23.4 percent.
Labour costs provided some relief to contractors, falling 2.9 percent year-on-year. Skilled labour declined by 1.8 percent, while unskilled labour fell by 4.6 percent. Labour contributed -12.1 percent to the headline inflation rate, helping to offset some of the upward pressure from materials and plant.
The data also showed wide differences across construction inputs. Plumbing recorded the highest price increase at 26.1 percent, followed by reinforcement at 24.2 percent, small tools at 23.4 percent, roofing sheets at 21.7 percent and glazing at 20.4 percent.
In contrast, steel prices declined by 8.9 percent, cement by 7.1 percent and fine aggregate by 5.1 percent.
Electrical works accounted for the largest share of the upward movement in the 4.6 percent headline rate, contributing 44.1 percent. This was followed by metalwork at 25.0 percent, glazing at 22.9 percent, plumbing at 19.5 percent and tiles at 13.9 percent.
The divergence in material prices reflects, in part, the relative stability of the Ghana cedi over recent months. The Bank of Ghana’s weighted interbank exchange rate stood at approximately GH¢11.69 to US$1 on July 31, 2026. Trade Minister Elizabeth Ofosu-Adjare had earlier linked falling cement prices to exchange rate stability, noting that 42.5R cement had fallen from about GH¢118 per bag to around GH¢107, while 32.5R cement declined from approximately GH¢113 to between GH¢80 and GH¢85.
The Ghana Real Estate Developers Association had also urged manufacturers to adjust prices in line with the cedi’s appreciation and actual production costs. Construction remains particularly sensitive to the cedi because several building inputs, machinery, equipment and finishing materials are either imported directly or contain significant imported components.
The moderate inflation environment comes amid forecasts of robust growth for Ghana’s construction industry. Industry analysts expect the sector to grow by approximately 5.9 percent in real terms in 2026, supported by public-private investment in transport, mining and energy infrastructure, alongside increased private sector participation in industrial and commercial developments. Over the medium term, the sector is projected to register an average annual growth rate of approximately 5 percent from 2027 to 2030.
The GSS is advising businesses to base contract pricing on current market evidence and carefully manage their exposure to plant, tools and construction materials experiencing high inflation. It also recommends flexible procurement arrangements and transparent price-adjustment clauses to help businesses manage changing input costs.
For households, the Service is encouraging builders to update their budgets using current prices, build in phases where possible, compare supplier quotations and prioritise local materials to cut expenses.
For government, the GSS says the data provides an opportunity to improve project delivery while closely monitoring plant and installation costs, strengthening artisan skills, improving procurement data and reinforcing local supply chains.
When the July figures were released, Government Statistician Dr. Alhassan Iddrisu noted that cheaper foundation materials were cushioning rising installation costs, but added that pressure on equipment and specialised materials needed close monitoring.
The August PBCI was compiled from monthly prices for 406 construction items collected from 489 outlets across 16 markets nationwide, covering materials, labour and plant or equipment. The figures suggest that while Ghana’s construction sector is operating in a much lower inflation environment than a year ago, cost risks have not disappeared — they are becoming more concentrated in plant, machinery and selected finishing materials that could pressure project budgets in the months ahead.
