The Construction Industry in Australia is Segmented by Sector (Residential, Commercial, Industrial, Infrastructure (Transportation), Energy, and Utilities). The Report Offers Market Sizes and Forecasts in Value (USD) for all the Above Segments.

In 2024, the Australia Construction Market reached $322.39 bn, and is projected to surge to $523.88 bn by 2030 due to rising infrastructure investment

Divergent trends in the building and infrastructure sectors have constrained the Construction division’s performance through the end of 2024-25, with revenue expected to drop by an annualised 1.2% to $521.2 billion. Rollercoaster-like trends in the residential building market and pandemic-related supply chain disruptions have constrained the performance of homebuilders and many special construction service industries. Still, favourable trends in non-residential building construction and non-building infrastructure construction generate buoyant conditions for some Construction division segments. New house construction surged to a record peak in 2021-22, supported by the Federal Government’s HomeBuilder stimulus and record-low interest rates. Still, new house construction has plunged in recent years following the hike in mortgage interest rates as the RBA seeks to quell inflation. Many small homebuilders have hit the wall in response to intense competition, escalating input costs and plunging profit margins. Conversely, the construction of multi-unit apartments and townhouses has gradually recovered from the deep trough in 2021-22 as investors return to address the severe rental shortages in the face of mounting population pressures. Divisional revenue contracted with the 2023-24 housing slump and is expected to sink 3.2% in 2024-25. Some large prime and specialist trade contractors have derived substantial stimulus from constructing landmark road and rail developments, including the WestConnex motorway in Sydney and the Cross River Rail in Brisbane. Similarly, conditions have been strong for contractors working on non-residential building projects, particularly accelerated growth in the construction of industrial warehouses and distribution facilities. Favourable trends in the residential building market are forecast to underpin modest growth in Construction division revenue at an annualised 1.2% over the five years through 2029-30 to $554.0 billion. Many prime building and special construction contractors will benefit from an upswing in demand for constructing multi-unit dwellings and, to a lesser extent, single-unit housing and home renovations. The housing market will benefit from the initiatives under the National Housing Accord. Construction activity will remain stable in the non-residential market. At the same time, the principal constraint on the Construction division will come from the staged completion of several landmark road and rail projects.

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Australia Construction Market Size 2025-2029

The australia construction market size is forecast to increase by USD 42.1 billion at a CAGR of 3.5% between 2024 and 2029.

The market is experiencing significant shifts driven by three key factors. Firstly, the mass population shift towards urban cities is fueling a surge in demand for residential and commercial construction projects. This trend is expected to continue as more people move to urban areas in search of employment opportunities and improved infrastructure. Secondly, the adoption of dry construction techniques is gaining momentum in the Australian construction industry. Dry construction methods, such as precast concrete and modular construction, offer numerous advantages, including faster construction times, reduced labor costs, and improved sustainability. As a result, many construction companies are investing in these methods to stay competitive and meet the increasing demand for efficient and cost-effective construction solutions. However, the market is not without its challenges. The rising cost of construction materials is a significant obstacle for construction companies in Australia. Raw materials, such as steel, cement, and timber, have seen significant price increases in recent years due to various factors, including supply chain disruptions and increased demand. This trend is putting pressure on construction companies to find ways to reduce material costs while maintaining quality and efficiency. Additionally, the industry is facing regulatory challenges, with stricter building codes and environmental regulations adding complexity to construction projects and increasing costs. To navigate these challenges, construction companies must focus on innovation, efficiency, and collaboration with suppliers and regulators to find solutions that meet the evolving needs of the market.

What will be the size of the Australia Construction Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2019-2023 and forecasts 2025-2029 - in the full report.
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The Australian construction market is characterized by a complex regulatory environment and a focus on innovation and sustainability. Construction industry regulations ensure building codes are met, while value engineering and construction cost management help minimize expenses. Sustainable building practices, such as energy efficiency and water conservation, are increasingly prioritized. Construction innovations, including prefabricated structures, automation, drones, and 3D printing, are transforming the industry. Construction risk analysis is crucial for project completion and scheduling, with safety regulations and quality assurance essential for workforce development. Construction equipment parts and repair, as well as heavy equipment rental, are key components of project risk assessment and cost management. The skills gap in the construction workforce is a significant challenge, with AI and modular construction offering potential solutions. Construction insurance claims and project risk assessment are integral to managing unexpected events and ensuring building performance. Construction labor shortages necessitate continuous workforce development and the adoption of new technologies.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. SectorBuilding constructionInfrastructure constructionIndustrial constructionEnd-userEngineeringResidentialNon-residentialTypeNew constructionRedevelopmentGeographyAPACAustralia

By Sector Insights

The building construction segment is estimated to witness significant growth during the forecast period.

The construction industry in Australia is marked by significant growth in both residential and commercial sectors. With an increasing population of 26.05 million people in 2022, according to World Bank Data, the demand for housing, whether single-family homes or multi-unit developments, is on the rise. Cities like Sydney and Melbourne have seen an increase in high-rise apartment projects to cater to the urban population. In commercial construction, the growing business sector fuels the demand for office and retail space. Environmental regulations play a crucial role in the industry, with a focus on sustainable practices and green building. Construction technology advances have led to innovations such as 3D modeling, construction software, and automation in heavy machinery like skid steer loaders and backhoe loaders. Construction safety is a top priority, with worksite safety regulations strictly enforced. Construction projects require substantial investment capital, from construction financing

Australia Data Center Construction Market Report Segments the Industry Into by Infrastructure (By Electrical Infrastructure, by Mechanical Infrastructure, General Construction), by Tier Type (Tier 1 and 2, Tier 3, Tier 4), by Data Center Type (Colocation, Self-Built Hyperscalers (CSPs) and More). The Market Sizes and Forecasts are Provided in Terms of Value (USD Million) for all the Above Segments.

From the first half of 2020 until the second half of 2021, Australia’s construction industry was disrupted due to the coronavirus pandemic. The industry had seen a steady rise in employment between 2015 and 2019, with the number of employees recovering to just over 1.27 million in 2022. As of November 2024, construction industry employment stood at approximately 1.36 million. How important is the construction industry? The construction industry plays a major economic role in Australia. The value of private sector construction was significantly higher than the value of public sector construction. Combined, these sectors cover engineering construction work, non-residential building, and residential building. Engineering construction work, which encompasses infrastructure, was the most predominant of the three. The value of residential construction work completed across Australia’s private and public sectors amounted to over 30 billion Australian dollars higher than that of non-residential construction work. Job outlook The leading occupations in Australia's construction industry were carpenters and joiners. Roles within this industry vary greatly, with many entry-level jobs not requiring a tertiary education degree. In terms of trade work, apprenticeships and traineeships were the main pathways to enter the market. While the job outlook has been relatively robust in this industry, the construction labor productivity index has been lower in recent years. On top of this, challenges faced in recent years, such as fluctuating material costs, project delays, and skilled worker shortages, could slow down growth in this industry.

Homeownership provides financial and emotional security and often represents an individual or family's most significant investment. House Construction industry contractors build single-unit (detached) dwellings or renovate and repair existing houses. Australia's solid population growth underpins the industry's performance. Still, a long-term shift in housing preferences towards constructing high-density apartments and townhouses has eroded revenue. House construction surged to a record peak in 2021-22 despite the pandemic restrictions and supply chain blockages impeding progress on construction projects. Homebuyers responded to record-low mortgage interest rates, favourable bank lending practices and the stimulus from the Federal Government's HomeBuilder scheme by unprecedented investment in new single-unit house construction and home renovations. As the housing market heated up, builders faced challenges juggling heavy workloads while dealing with supply bottlenecks, skill shortages and rising costs. The industry's revenue performance has taken a hit in recent years as housing investment slumped following the hike in mortgage interest rates as the RBA lifted official cash rates to quell inflation. Meanwhile, the HomeBuilder scheme wound down with the completion of funded projects. Industry revenue is expected to fall by 2.9% in 2024-25 and decline at an annualised 1.5% over the five years through 2024-25 to $76.1 billion. The industry's profit margins have suffered, partly reflecting the supply chain disruptions during the housing boom stemming from the COVID-19 restrictions. These bottlenecks delayed construction projects and inflated input prices for building materials, fuel, capital equipment and skilled labour. Fixed-price contracts and escalating input costs have pushed many homebuilders to the brink. Mounting population pressure and some easing in mortgage interest rates will support the moderate recovery in the industry's performance. Homebuilders may also derive some support from a commitment to construct 1.0 million new homes under the National Housing Accord. Still, much of the focus of residential building construction will shift towards high-density apartment and townhouse developments rather than single-unit houses. Industry revenue is forecast to climb at an annualised 1.4% to $81.6 billion through the end of 2029-30.

The Australia construction market reached a value of nearly USD 318.03 Billion in 2024. The market is assessed to grow at a CAGR of 3.20% during the forecast period of 2025-2034 to attain a value of around USD 435.78 Billion by 2034. The market growth can be attributed to rapid urbanisation, increasing investments in renewable energy infrastructure, the rising prevalence of natural disasters, the surging development of smart cities, and the expansion of healthcare infrastructure.

The Australian construction market, valued at $172.29 million in 2025, is projected to experience robust growth, driven by significant infrastructure development initiatives and a burgeoning residential sector fueled by population growth and urbanization. A Compound Annual Growth Rate (CAGR) of 5.0% from 2025 to 2033 indicates a substantial expansion of the market over the forecast period. Key drivers include government investments in transportation networks (roads, railways, and airports), renewable energy projects, and public building programs. Trends such as the increasing adoption of sustainable building practices, technological advancements in construction methodologies (like Building Information Modeling – BIM), and a focus on improving project efficiency and minimizing disruptions are shaping the market landscape. While potential restraints such as material price fluctuations and skilled labor shortages exist, the overall positive outlook is underpinned by consistent government support and a strong pipeline of projects across various sectors—residential, commercial, industrial, infrastructure, and energy and utilities. Major players like CPB Contractors, Lendlease, and others, are well-positioned to capitalize on these opportunities. The segmentation of the market reveals significant opportunities across all sectors. The residential segment is anticipated to lead growth, driven by increased demand for housing, particularly in major metropolitan areas. The infrastructure sector will see considerable investment, contributing significantly to overall market expansion. Commercial construction will benefit from ongoing business expansion and investment in office spaces and retail developments. The energy and utilities sector's growth will be driven by renewable energy projects and upgrading existing infrastructure to meet rising energy demands. The Industrial sector is poised for moderate growth, driven by manufacturing and logistics needs. Understanding the nuances of each sector and strategically allocating resources will be crucial for companies seeking success in the competitive Australian construction market. Recent developments include: May 2023: New office of the Indonesia-Australia partnership for Infrastructure (KIAT) was opened by the Australian ambassador to Indonesia, Penny Williams (PSM), and minister of public works and housing of the Republic of Indonesia, Basuki Hidayat., July 2022: Laing O'Rourke entered into a strategic partnership with Robotics Australia Group, a leading agency in the robotics sector in Australia. This partnership is anticipated to explore how current and emerging robotics technologies can address key challenges in the construction sector, including productivity, labor shortages, and safety., April 2022: Thiess, a CIMIC Group company, entered into a business cooperation agreement to provide mine design and engineering services to Tata Steel. As part of the deal, Thiess is expected to work with Tata Steel to provide competitive integrated business solutions to the global mining industry. Tata Steel is one of the world's most geographically diverse steel producers, offering a fully integrated steel business from mining to manufacturing to finished product marketing.. Key drivers for this market are: Government Initiatives is driving the market, Increase In Residential Sector. Potential restraints include: Government Initiatives is driving the market, Increase In Residential Sector. Notable trends are: Increase in Non-Residential and Infrastructure Construction.

Australia Data Center Construction Market was valued at USD 3.10 Billion in 2023 and is expected to reach USD 4.46 Billion by 2029 with a CAGR of 6.10% during the forecast period.

In 2022, the revenue of the construction industry in Australia amounted to around *** billion Australian dollars, marking a slight increase from the previous year. The country's construction industry revenue was forecasted to fluctuate in the coming years.

Market Size statistics on the House Construction industry in Australia

Wide fluctuations in revenue have characterised the Institutional Building Construction industry over the past five years, with revenue dipping to a low point in 2021-22 in response to the COVID-19 pandemic. The slump coincided with the completion of several large-scale developments, including the Victorian Heart Hospital at Monash University, the New Maitland Hospital in the Hunter Valley and the Victorian Quarantine Hub. The pandemic was the catalyst for chaos in the aged-care sector, ultimately leading to a Royal Commission and severely eroded investment in aged-care facilities. Buoyant trends in public spending and greater private equity involvement in public building stock through public-private partnerships (PPPs) have underpinned a surge of investment in institutional buildings since 2022-23. Much of the stimulus for industry expansion has come from increased hospital funding in response to greater scrutiny of public health policy since the pandemic. These included giant developments like the Toowoomba Hospital in Queensland and PPP-funded Frankston Hospital Redevelopment in Victoria. Solid growth in constructing educational and miscellaneous buildings like correctional facilities has generated scope for builders. Still, cutbacks in funding for aged-care facilities pose problems for some smaller and specialist contractors. Over the five years through 2024-25, industry revenue is expected to have expanded at an annualised 1.9% to $33.6 billion. Only marginal growth of 0.3% is anticipated in the current year, corresponding with the completion of several landmark hospital developments and weaker spending on tertiary education buildings. Industry profitability has improved slightly through 2024-25, supported by favourable demand conditions but partly contained by a hike in input prices stemming from supply chain disruptions during the pandemic. Going forwards, the Institutional Building Construction industry is set to deliver solid revenue growth in response to a flow of public and private sector funding for health care and an upswing in funding for aged-care buildings to meet an expanding population base. While tight budgetary conditions will continue to check government investment in institutional buildings, a growing reliance on the PPP model for funding construction of hospitals and prisons will underpin growth in these segments. Industry revenue is forecast to climb at an annualised 2.8% through the end of 2029-30 to total $38.5 billion, with favourable growth conditions supporting wider industry profit margins and attracting increased participation.

The global construction market, valued at $224.31 billion in 2025, is projected to experience steady growth, driven by robust infrastructure development, particularly in emerging economies experiencing rapid urbanization. A Compound Annual Growth Rate (CAGR) of 3.5% from 2025 to 2033 suggests a significant expansion of the market over the forecast period. Key drivers include increasing government spending on infrastructure projects, rising demand for residential and commercial spaces, and technological advancements leading to improved construction efficiency and sustainability. The market is segmented by sector (building, infrastructure, industrial), end-user (engineering, residential, non-residential), and type of construction (new construction, redevelopment). While the Australian market is specifically mentioned, global market dynamics are significantly influencing growth across various regions. Competitive pressures among leading companies are shaping market positioning, with firms focusing on strategic partnerships, technological innovation, and risk mitigation strategies to maintain a strong market presence. Challenges include fluctuating material prices, labor shortages, and regulatory hurdles in certain regions. However, the overall outlook remains positive, driven by ongoing urbanization, economic growth, and the need for upgraded infrastructure globally. The construction market's segmentation provides valuable insights into its diverse composition. The building construction segment is expected to dominate, fueled by a growing population and increasing disposable incomes, particularly in urban areas. Infrastructure development, including transportation networks and utilities, is another key driver, with government initiatives and private investments significantly impacting market growth. The industrial construction sector shows potential for expansion as manufacturing and logistics sectors develop. Within the end-user segment, residential construction, driven by demographic shifts and housing demand, is expected to show continued growth. The non-residential segment, encompassing commercial and institutional buildings, will likely experience steady expansion, fueled by economic activity and investments in office spaces, retail complexes, and other facilities. New construction projects are expected to comprise a larger share of the market, though redevelopment projects also hold significance, particularly in dense urban areas aiming for sustainable development and infrastructure upgrades.

The Market for Modular Construction in Australia Report is Segmented by Material Type (Concrete, Glass, Metal, Timber, and Other Material Types) and Application (Residential, Commercial, and Other Applications (Infrastructure and Industrial)). The Report Offers Market Sizes and Forecasts in Value Terms (USD) for all the Above Segments.

The Australia construction equipment market was estimated at 25,224 units in 2023 and is expected to reach 33,077 units by 2029, growing at a CAGR of 4.62%.

The data center construction market in Australia is segmented into a number of products, including:

Electrical infrastructure: This includes power distribution solutions, transfer switches, switchgear, power panels, and components. Mechanical infrastructure: This includes cooling systems, racks, and other mechanical infrastructure. General construction: This includes the construction of the data center itself, as well as the site preparation and landscaping.

The electrical infrastructure segment is the largest segment of the data center construction market in Australia. This is due to the fact that data centers require a significant amount of power to operate. The mechanical infrastructure segment is the second largest segment of the data center construction market in Australia. This is due to the fact that data centers require a significant amount of cooling to prevent their equipment from overheating. Recent developments include: August 2022: Equinix announced that it completed the USD 15.7 million expansion of its second Melbourne data center. First opened in February 2020, the ME2 site in Port Melbourne acquired 500 new cabinets, increasing the facility's total to 1,500 cabinets and colocation space covering 4,070 square meters (43,800 sq ft). The data center is planned to eventually span over 8,200 square meters (88,150 sq ft) and will house 3,000 cabinets., August 2022: Canberra Data Centres announced that it has signed a new 10-year deal with the Defence last month. The USD 91.5 million Defence contract is double the value of its previous most lucrative contract with the big spending department, and was revealed through public tender documents.. Key drivers for this market are: Increasing Rate of Data Traffic, Adoption of Colocation Services For Cost Effective Solution; Thriving Digital Transformations Fueling Data Center Demand. Potential restraints include: Limitations on Data Security Features. Notable trends are: Tier 3 is the Largest Tier Type.

Australia Construction Market growth is driven by increasing infrastructure investments, urbanization, and technological advancements in construction methods.

In financial year 2024, the labor productivity index (LPI) of the construction industry in Australia amounted to 103.97 compared to the base year of 2023.

Market Size statistics on the Factory and Industrial Building Construction industry in Australia