Ugandans undertaking construction projects are facing higher costs today following an increase in the price of basic construction materials compared to last year.

Consequently, most project owners are being forced to abandon them or prolong the completion schedule to cope with the costs.

The overall price index for the construction sector increased by two per cent in the second quarter of 2009 up from two per cent in the first three months of the year according to the Uganda Bureau of Statistics.

Cement, lime and concrete materials such as sand, course gravels, and steel bars all recorded the highest increases over the period.

The highest increase registered was in cement with 15 per cent, lime with 16 per cent, while concrete products rose by 11 per cent.

The price of cement now ranges between a minimum of Shs27,000 and Shs30,000 per 50 kilogrammes from Shs25,000 in the first quarter. Lime costs Shs15,000 for a 25kg bag and steel bars range between Shs18,000 and 55,000 depending on size.

Speaking at the Construction Sector Indices (CSI) workshop yesterday, the principal statistician, Energy and Infrastructure, Mr Peter Opio, said though the increase was at a lower rate, the product end-user was still affected because of constraints on project budgets.

Mr Opio attributed the rise in cement and concrete products prices to the increase in the price of gypsum, a raw material used in manufacturing cement as a result of the high exchange rate of the Uganda shilling to the US dollar and fluctuation in international oil market prices.

The index for civil works such as road, bridges and water channels increased by one per cent from 133 to 135 due to increase in the price of bitumen, while the index for residential buildings rose by approximately 4 per cent from 145 to 151 the highest increase compared to non-residential buildings that went up by 2 per cent from 144 to 147. The relative drop by 2 per cent in input prices for roads gravel is as a result of decrease in price of mainly diesel that fell by 9 per cent in the 2nd quarter of 2009 compared to quarter one of 2008.

However, CSI registered reduced prices in electrical cables which fell by 15 per cent, diesel cut down by 9 per cent, steel bars came down by 5 per cent while roofing sheets reduced by 4 per cent. Water tanks and clay brick remained unchanged.

UBOS' Senior Statistician Mr John Musoke said the country's annual producer price index rose by 7.1 per cent in the year ending June 2009 compared to 25.9 per cent rise in June 2008.

Producer price index refers to an overall change in price received by producers for goods manufactured valued at basic prices exclusive of taxes.

He however, said the year ending May 2009, prices rose by 7.6 per cent due to increase in prices in all the subsectors.

Wood, printing and publishing registered the highest annual increase with about 14.3 per cent, 12.4 per cent in bricks and cement while 2.1 per cent was registered in processed food.

Quarterly, bricks and cement registered the highest with 9.9 per cent increase, 5.8 per cent in 5.8 while textiles, clothing and footwear registered the lowest with 2.9 per cent.

Mr Musoke attributes high increase in food prices to the 14.6 per cent increase in prices of processed fish and the 14.2 increase in processed tea and coffee.