Ghana's annual Prime Building Cost Index (PBCI) inflation rate reached 2.7 percent in May 2026. This marks an increase from the 2.2 percent recorded in April, according to data from the Ghana Statistical Service (GSS). This modest acceleration follows several months of decreasing inflation rates in the construction sector.
The increase in building costs was primarily driven by rising prices for equipment and specialized building inputs. This occurred even as the cost of key construction materials like cement and steel continued to fall. The diverging cost trends highlight an evolving dynamic within Ghana's construction industry.
This slight uptick in building cost inflation comes after a significant drop from 22 percent a year earlier. The overall trend indicates a deceleration from previous highs, aligning with broader efforts to stabilize the Ghanaian economy. However, the current increase shows that inflationary pressures persist in specific sectors.
The GSS data shows that materials remain the largest contributor to rising construction costs, accounting for nearly all the headline increase. Electrical works, in particular, were the single largest contributor to year-on-year construction inflation, responsible for over 63 percent. Other significant contributors included glazing, metalwork, plumbing, and tiles.
A notable development was the sharp acceleration in plant inflation, which refers to the cost of equipment and construction tools. These costs increased by 9.8 percent year-on-year in May, more than double the 4.7 percent recorded in April. This rise in equipment expenses exerted considerable upward pressure on the overall index.
Conversely, labour costs moved into deflationary territory, falling to negative 2 percent in May from positive 1 percent in April. This decline in labour expenses played a crucial role in moderating the overall increase in building inflation. The continued decline in cement prices, down 14.5 percent year-on-year, and steel prices, down 8.1 percent, also helped offset some of the rising input costs.
The PBCI tracks how much it costs to build structures, considering materials, labour, and plant equipment. On a monthly basis, building costs increased by 1.4 percent, continuing a trend of monthly increases observed since the beginning of the year. The materials component, which carries a weight of 76.5 percent in the index, saw its year-on-year inflation rise to 3.5 percent in May from 2.4 percent in April.
Plumbing costs recorded the steepest increase, rising 22.8 percent year-on-year. Roofing sheets followed with a 19.9 percent increase, and glazing costs rose by 18.5 percent. Electrical works, metalwork, and reinforcement materials also experienced double-digit inflation. These specific increases highlight the varied challenges within the construction supply chain the Ghanaian economy is currently facing.
Market participants and policymakers will be closely watching these trends. Rising building costs could impact the affordability of housing and infrastructure projects across Ghana. The Bank of Ghana may consider these inflationary pressures during its monetary policy decisions. Businesses in the construction sector will need to adapt to these fluctuating input costs and labour market conditions.