Construction Costs Take a Breath: Building Inflation Slows for 8th Straight Month
The latest data from the Ghana Statistical Service reveals a positive trend in the construction sector. Building cost inflation has continued its downward trajectory, marking an 8th consecutive month of easing price pressures. This slowdown is a welcome relief for developers, contractors, and policymakers alike.
In December 2025, the Prime Building Cost Index reached 131.0, a slight increase from the previous year's 125.5. This translates to a year-on-year inflation rate of 4.4%, down from 5.9% in November. On a month-to-month basis, prices dropped by 0.2%, indicating a marginal easing of construction input costs towards the end of the year.
The index, which tracks changes in building materials, labor, and plant equipment costs, provides valuable insights for the industry. Dr. Alhassan Iddrisu, Government Statistician, highlights the positive outlook: "The December 2025 figures show that building inflation is slowing down, with key input prices stabilizing or slightly decreasing. This indicates that the intense cost pressures have eased, offering a breather for households, businesses, and the government in planning construction activities."
Materials inflation played a significant role in this slowdown, with year-on-year growth slowing to 2.7% in December, down from 4.2% in November. On a monthly basis, material prices slipped by 0.1%. Negative annual inflation was recorded for cement, reinforcement, and roofing sheets, contributing to the overall cost reduction.
Labor costs, while still elevated, showed a positive shift. Year-on-year labor inflation slowed to 10.7%, down from 12.7% in November, and month-on-month prices declined by 0.9%. Both skilled and unskilled labor witnessed slower annual increases, reflecting improved supply and easing demand pressures.
However, plant and equipment costs emerged as the primary source of upward pressure. Year-on-year inflation in this category rose slightly to 5.6%, with prices increasing by 1.5% on a month-to-month basis. Equipment recorded the highest sub-group inflation at 14.9%, highlighting the persistent cost pressures associated with machinery in construction.
Despite this slowdown, officials urge caution. Dr. Iddrisu emphasizes, "While inflation is decreasing, labor costs remain relatively high, and equipment prices are still rising. Addressing skills gaps through training and securing medium-term contracts will be crucial to sustaining the positive momentum we're witnessing."
The statistical service suggests that this easing trend presents an opportunity for the government to accelerate infrastructure projects and for households to plan building work strategically while cost pressures remain manageable.
