Labour Inflation Eases to 10.7% in December 2025

By Praisebell Rosemond Larbi

Labour inflation in Ghana’s construction sector continued to slow in December 2025, reinforcing signs of easing cost pressures across the building industry, according to the latest Prime Building Cost Index and Inflation Report released by the Ghana Statistical Service (GSS).

Data from the report show that labour inflation fell to 10.7 per cent year-on-year in December 2025, down from 12.7 per cent in November 2025 and a sharp decline from 21.3 per cent recorded in December 2024.

On a month-on-month basis, labour costs declined by 0.9 per cent between November and December 2025, signalling short-term easing in wage and labour-related pressures within the sector.

Commenting on the trend, the Government Statistician, Dr. Alhassan Iddrisu, noted that while labour costs remain elevated compared to a year ago, recent movements suggest improving conditions.

“Labour costs are still higher than last year, so year-on-year pressures remain. However, in the short term, from November to December 2025, labour costs actually eased. This suggests that labour markets in construction remain an area to watch, particularly because labour inflation is still above the overall building inflation rate,” Dr. Iddrisu said.

Material Prices Stabilise Further

Materials, which typically account for the largest share of total building costs, recorded some of the strongest signs of stabilisation during the period.

Year-on-year material inflation slowed sharply to 2.7 per cent in December 2025, compared with 4.2 per cent in November 2025 and 23.5 per cent in December 2024. On a monthly basis, material prices declined marginally by 0.1 per cent, reinforcing the view that price volatility has eased significantly.

“This is a very important signal. It suggests that material prices are stabilising, and the intense price increases that households and contractors experienced in earlier periods are no longer as strong,” Dr. Iddrisu emphasized.

The easing in material costs is expected to improve project planning, budgeting and cost predictability for developers and contractors after several years of sharp price swings.

Plant Costs Buck the Trend

In contrast, plant costs, which include machinery and equipment, recorded renewed upward pressure.

Plant inflation rose to 5.6 per cent year-on-year in December 2025, up from 5.3 per cent in November 2025, while month-on-month prices increased by 1.5 per cent.

“This is where we see a different story. While overall inflation declined and material prices eased, plant costs moved upwards. This matters because plant costs directly affect contractors involved in road works and large-scale infrastructure projects that depend heavily on machinery and equipment,” Dr. Iddrisu observed.

Uneven Pressures Persist

Overall building inflation stood at 4.4 per cent year-on-year in December 2025, with a negative month-on-month reading, confirming a calmer inflation environment. However, the breakdown shows uneven cost pressures across components.

Labour inflation remains relatively high despite recent easing, material inflation has largely stabilised, while plant costs continue to exert upward pressure.

“What this tells us is that even when overall inflation slows, some cost pressures remain active. Equipment and specialised services continue to exert upward pressure, and these differences matter for policy, planning, and investment decisions in the construction sector,” Dr. Iddrisu explained.

The GSS said further analysis of sub-components within labour, materials and plant costs will provide deeper insights into remaining inflationary pressures in the industry.