Rainy days and the price of construction materials

Q. Fernando Morales of Manila writes: "I am a small-time dealer of construction materials here in Manila. I am basically new in the business. I have noticed that prices of the products that I sell go down during the rainy months.

"For me, it’s basically because of their very short shelf life–steel may get rusty and cement may harden during this season. The answer sounds logical, right?

"But just the same, I get a little bit puzzled. Is there a concrete explanation as to why prices tend to decline during rainy days? I understand that DTI monitors prices of basic commodities in the market and these prices are printed in newspapers and are shown on TV. But how about construction materials? Do you monitor these too?"

A Yes. The DTI monitors not only the prices of basic commodities in the market but construction materials as well. The monitoring of construction materials is done through the Construction Industry Authority of the Philippines, one of our attached agencies that oversees various aspects of the construction industry.

Here is one major reason why prices of construction materials go down on rainy days. Historically, construction activity is down during the third quarter of the year. Given the law of supply and demand, the lower demand for construction materials vis-à-vis the given supply will pull down prices. Conversely, construction prices normally go up during the months of March, April, and May as builder take advantage of the dry summer months.

The inconvenience of transporting construction materials during the rainy months could also be another factor in low construction demand during the third quarter.

(You may send your consumer complaints and comments to the Bureau of Trade Regulation and Consumer Protection, DTI-Domestic Bldg., 361 Sen. Gil Puyat Ave., Makati City. You may also call us at our consumer hotlines 896-5740 or 890-4938. Our e-mail address is www.e-reklamo.net.ph)