The Australia Construction Market Report is Segmented by Sector (Residential, Commercial, and Infrastructure), by Construction Type (New Construction and Renovation), by Construction Method (Conventional On-Site and More), by Investment Source (Public and Private), and by Geography (New South Wales, Victoria, and More). The Market Forecasts are Provided in Terms of Value (USD).

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.

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.

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.

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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 and project bidding to construction c

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 **** million in 2022. As of *************, construction industry employment stood at approximately **** 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 ** 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.

The Australia construction market was valued at USD 190.40 Billion in 2024. The industry is expected to grow at a CAGR of 3.31% during the forecast period of 2025-2034 to attain a valuation of USD 263.69 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.

Australia construction market valued at AUD 320 billion, driven by infrastructure investments and urbanization, expected to grow at 4.5% CAGR through 2030.

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.

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.

Number of Businesses statistics on the House Construction industry in Australia

By Build Type:The Australia digital construction market is also segmented into colocation facilities and hyperscaler self-builds. Colocation leads with roughly 57 % share, driven by demand for turnkey infrastructure solutions that offer flexibility, lower entry costs, and ease of expansion without owning the full asset base. It's particularly favored by enterprises and service providers seeking rapid deployment. In contrast, hyperscaler self-builds account for ~43 % and are growing rapidly, driven by large-scale cloud operators like AWS, Microsoft, and Google, who require bespoke power, AI-capable architectures, and sovereign control over their physical infrastructure. By Facility Tier:In Australia, digital construction is segmented into Tier 3 and Tier 4 facilities. Tier 3 clearly holds the lion’s share—around 68 %—due to its compelling combination of high availability, manageable costs, and conformity with enterprise reliability expectations. It strikes the ideal balance for most cloud providers and institutional users who require robust uptime without the elevated costs of Tier 4 configurations. Tier 4, while technically superior, remains a smaller yet swiftly expanding segment, driven by specialized use cases, such as AI computing clusters and sovereign cloud mandates, that prioritize zero downtime and full redundancy. Australia Digital Construction Market Segmentation

As of February 2025, there were around ******* people employed in the building installation services sector of Australia's construction industry. In comparison, there were around ****** employees recorded in Australia's land development and site preparation services sector.

Institutional builders have faced mixed conditions in the past few years, but robust population growth since emerging from pandemic restrictions and favourable public and private investment trends have underpinned constant work. Government departments and agencies fund most institutional building construction, and the public sector is the dominant funding source for educational and healthcare buildings. Still, the private sector is an essential and growing funding source for constructing healthcare buildings, aged-care facilities and religious buildings. Most governments have trimmed budgetary spending over the past decade by promoting private equity involvement in public building stock through public-private partnerships (PPPs). Industry revenue is anticipated to have expanded at an annualised 1.3% over the past five years and is expected to total $29.5 billion in 2023-24, when revenue will rise by an estimated 2.2%. The COVID-19 pandemic influenced the industry’s performance, initially discouraging planned private investment in education and aged-care building projects and disrupting the industry’s supply chain. Still, robust growth in investment in large-scale hospital developments and an expansion in educational building construction to meet mounting population pressures have underpinned industry expansion. Some contractors have also benefited from constructing large-scale correction facilities and miscellaneous buildings like military facilities. 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 healthcare and aged-care buildings to meet an expanding population base. Governments’ capacity to fund new building projects may weaken in the short term as they recover from pandemic blowouts. Still, the PPP funding model may help meet the growing requirement for public buildings. Industry revenue is projected to climb at an annualised 1.7 % through the end of 2028-29 to total $32.1 billion, with favourable growth conditions supporting wider industry profit margins.

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.

The Australia data center construction market size is projected to grow at a CAGR of 6.98% between 2025 and 2034.

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 Report Covers the Australian Construction Machinery Market Share and is Segmented by Application Type (material Handling, Earth Moving, and Transportation) and Machinery Type (hydraulic Excavators, Wheel Loaders, Crawler Trucks, Dump Trucks, and Motor Graders). The Report Offers Market Size and Forecasts for the Australian Construction Machinery Market in Value (in USD) for all the Above Segments.

The gross value added (GVA) by the building construction industry in Australia amounted to over 38.9 billion Australian dollars in the year ended December 2024. The highest GVA recorded by Australia's building construction within the given period was in 2018.