Despite the advancement in the management of the construction industry, construction projects still face the issue of cost overruns. This cost overrun is most due to macroeconomic factors that are uncontrollable at the firms’ level. The most critical of those factors included 1. Inflation, 2. Real Interest rates, 3. Exchange rates, and 4. GDP growth. Therefore, this study aims to investigate the behavior of building materials prices and their correlation with the above-mentioned factors. The Spearman test was adopted to measure the correlation. The correlation was investigated by the individual materials of Cement, Steel, Sand Crush, Building Glass, UPVC Pipe, Common Clay Brick, Stainless Steel Sink, Electric Switch PPI, Cable, Ceiling Fan, Distemper, Matt Finish Paint, Tube Light, Wall Tile. The result revealed that exchange rate, inflation, and real interest rates have a significant and positive relationship with cement and Building Glass. Sand and crush are also strongly and positively related to real interest rates, and inflation, whereas UPVC pipes are positively related to inflation, but negatively related to GDP growth. Real interest rates are positively associated with Steel, Cable, Ceiling Fans, and Tube lights. Interestingly, GDP growth seems to decrease the prices of Electric Switch, Cable, Ceiling Fan, Matt Finish Paint, and TubeLight. Therefore, it is essential to consider these factors while calculating the budget at the beginning of the construction project
