Construction Market

Overall, the construction industry is forecast to see modest growth of around 2% per year through 2028-29, with revenue reaching about $522 billion. Construction of multi-unit buildings and non-residential buildings will provide good conditions for major contractors. Renovation and house building is likely to recover gradually, helping smaller contractors. However, completion of large infrastructure projects may constrain overall growth. Profits are expected to improve as most construction markets trends get better.

In the near term, the construction performance is constrained through 2023-24 with expected revenue falling about 2% to around $472 billion. Issues like fluctuations in the housing market and supply chain disruptions during the pandemic have impacted sectors like residential building and specialty trades. Nonetheless, non-residential construction and non-building infrastructure are performing well for some segments.

Home builders and specialty contractors recently benefited from high new home construction spurred by stimulus programs, but housing starts have dropped with rate hikes. Apartment construction declined from peak levels in 2017-18 but is recovering due to population increases. Housing weakness is projected to contribute to a 5% revenue decline in 2023-24 for the construction overall.

Some large construction companies have benefited from major road and rail projects in Sydney and Brisbane like WestConnex motorway and Cross River Rail. The industrial warehouse and distribution facility construction sector has seen strong growth, driving higher non-residential building construction.