Ghana’s building cost inflation rises to 4.6% as equipment costs remain key risk

Ghana’s building cost inflation rose to 4.6% in August 2026, from 4.0% in July, driven largely by higher prices of construction materials and continued pressure from plant and equipment costs.

The Government Statistician, Dr. Iddrisu Alhassan, disclosed this at the release of the August 2026 Prime Building Cost Index (PBCI) by the Ghana Statistical Service (GSS).

According to Dr. Alhassan, building costs increased by 4.6% year-on-year in August 2026, while prices recorded a marginal 0.1% increase between July and August 2026.

He noted that although building cost inflation has increased in recent months, the current rate remains significantly below the 12.0% recorded in August 2025, reflecting a substantial moderation in the pace of construction cost increases over the past year.

The PBCI stood at 138.4 in August 2026, compared with 132.3 in August 2025, while the annual average inflation rate for the 12 months to August 2026 was 4.3%.

Dr. Alhassan explained that materials remained the dominant source of pressure on building costs, recording 5.8% year-on-year inflation in August, compared with 5.1% in July.

Materials account for 76.5% of the PBCI basket and contributed 96.5% of the upward movement in the headline building inflation rate.

He said the figures demonstrate that construction costs are being influenced by different movements across individual inputs rather than by a uniform increase in prices.

Among the construction inputs recording the fastest price increases were plumbing, 26.1%; reinforcement, 24.2%; small tools, 23.4%; roofing sheets, 21.7%; and glazing, 20.4%.

In contrast, prices of some major inputs declined. Steel fell by 8.9%, cement by 7.1%, fine aggregate by 5.1%, unskilled labour by 4.6%, and skilled labour by 1.8%.

Dr. Alhassan identified plant and equipment costs as an area requiring closer attention from businesses and policymakers.

Plant inflation stood at 17.9% year-on-year in August, marginally lower than the 18.0% recorded in July.

Although plant has a relatively small 4.0% weight in the PBCI basket, it contributed 15.6% to the headline inflation rate, underscoring its impact on overall construction costs.

Small tools recorded inflation of 23.4%, while equipment prices increased by 10.7% over the same period.

The Government Statistician also pointed to labour costs as a factor helping to moderate overall building cost pressures.

Labour inflation was recorded at -2.9% in August, compared with -3.2% in July. Skilled labour costs declined by 1.8%, while unskilled labour costs fell by 4.6% year-on-year.

Labour consequently recorded a negative 12.1% contribution to headline building inflation, partly offsetting increases recorded in materials and plant.

Dr. Alhassan said the latest figures provide important information for contractors, developers, investors and government agencies involved in construction.

The GSS has encouraged businesses to use current market evidence when pricing contracts and to carefully manage their exposure to plant, tools and construction materials experiencing higher inflation.

The statistical service also recommends flexible procurement arrangements and transparent price-adjustment clauses to help businesses manage changes in construction costs.

For government, the GSS says the relatively lower inflation environment presents an opportunity to improve project delivery while closely monitoring plant and installation costs and strengthening artisan skills, procurement data and local supply chains.

The August figures point to a construction sector where overall inflation has moderated considerably compared with a year ago, but significant price pressures remain in selected areas.

Dr. Alhassan said the key message from the latest PBCI is that building inflation remains low overall, while plant, tools and selected installation materials have emerged as the main pressure points.

The GSS says the PBCI is intended to provide businesses, households, investors and government with reliable cost information for budgeting, contract decisions, project planning and investment decisions.

Story by: Joshua Kwabena Smith