Australia Construction Market

Market Overview:

Australia construction market size reached USD 403.2 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 588 Billion by 2033, exhibiting a growth rate (CAGR) of 4.3% during 2025-2033. The market is driven by environmental considerations and a growing focus on sustainability which contributes to the adoption of eco-friendly construction practices.

Australia Construction Market Analysis:

• Major Market Drivers: In Australia, the growing demand for affordable housing developments, mixed-use developments, micro-apartments, etc., is positively influencing the current market. Moreover, the increased emphasis on sustainable construction practices, including renewable materials, energy-efficient design, green building certifications, etc., are supporting the growth of Australia construction industry.
• Key Market Trends: The rapid emergence of new buildings and structures is invariably transforming urban landscapes. Continuous innovations in construction technology, such as prefabrication, sustainable building practices, BIM, etc., also influence the project efficiency, sustainability, cost-effectiveness, etc.
• Competitive Landscape: Some of the major market players in Australia construction industry includes Laing O’Rourke, Lendlease Corporation, CIMIC Group, CPB Contractors, Hutchinson Builders, among many others.
• Challenges and Opportunities: Australia’s vulnerability to various natural disasters, including floods, cyclones, bushfires, etc., affects the construction trends, particularly in terms of resilient and adaptation measures. However, the ongoing advancements in battery technology, increasing government support, and the strategic importance of energy independence present significant growth opportunities for market players.

Australia Construction Market Trends

Increase in Non-Residential and Infrastructure Construction

Although commercial construction has recently outperformed, this surge is expected to normalize in the coming period. The office construction, education, and lodging sectors are expected to see a considerable decrease in growth, while transport, healthcare, and retail could face more positive outcomes. With state-sponsored initiatives and incentives in energy and transport gaining momentum, there is an overall optimistic view in the construction sector for potential growth within the forecast timeframe. Looking forward, the Reserve Bank of Australia's commitment to maintaining low interest rates for the upcoming three years suggests that construction expenses might remain manageable throughout 2023 at the very least. However, industry insights and research indicate that the expansion in Australia's non-residential construction sector is plateauing, with a downturn in growth expected over the next few years.

The Emergence of Prefabricated Housing Facilities

Prefabricated housing is gaining extensive traction generally due to the demand for low to mid-rise project homes, residential buildings, public housing, etc. Lightweight and high-quality prefabricated modular systems are anticipated to drive the use of housing stock with optimal amenities for occupants at an extensively minimal cost as compared to traditional housing. As the population in Australia is expected to grow by 60%, with 37.6 million people by 2050, the key players in the construction industry are introducing cost-effective and well-designed inner-city developments at higher densities. Consequently, prefabricated housing is widely adopted, as it provides enhanced efficiency and optimal productivity.

The Rising Focus on Sustainable and Green Building Practices

Leading players in the country are usually focusing on sustainability, which has become a major trend in the Australia construction market. In line with this, the escalating demand for green building practices, such as the widespread adoption of energy-efficient designs, eco-friendly materials, and construction methods that minimize environmental impact, is acting as a significant growth-inducing factor. Numerous other factors, including regulatory requirements, environmental awareness among consumers and businesses, and the cost-effectiveness associated with sustainable buildings, are further driving the market in Australia. In conclusion, the government bodies in Australia are launching favorable policies in the construction industry to achieve a net zero built environment by 2040. These regulatory bodies are introducing the National Construction Code (NCC), which generally requires new buildings to meet minimum energy efficiency standards.

Navigating the Emerging Regulatory Challenges 

The diverse regulatory landscape across the country's states requires a strategic approach to ensure strict compliance at all project stages. As such, construction professionals are advised to stay well-informed about specific regulations and engage with digital document management tools to streamline adherence to regulatory requirements. The National Construction Code (NCC) is the primary regulatory document outlining the standards for building construction. This includes all aspects, including plumbing standards, lighting rules, accessibility norms, etc. In addition to this, occupational health and safety (OHS) regulations and planning and zoning laws vary across states and polities.

Technological Integration and Innovation

The growing integration of advanced technologies in the construction processes is also positively influencing the market across the country. The inflating usage of digital tools, such as Building Information Modelling (BIM), drones, augmented reality (AR), etc., for planning, design, and project management is further propelling the market growth in Australia. These technologies are gaining extensive traction as they provide efficiency, accuracy, and safety, thereby facilitating better outcomes for complex construction projects. Leading contractors in Australia, such as Lend Lease, Laing O’Rourke, Strongbuild, Hickory, etc., are widely investing in these innovations, which will continue to augment the market growth in the coming years.

Australia Construction Market Segmentation

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for 2025-2033. Our report has categorized the market based on sector.

Sector Insights:

• Residential
• Commercial
• Industrial
• Infrastructure
• Energy and Utilities
   

The report has provided a detailed breakup and analysis of the market based on the sector. This includes residential, commercial, industrial, infrastructure, and energy and utilities.

Regional Insights:

• Australia Capital Territory & New South Wales
• Victoria & Tasmania
• Queensland
• Northern Territory & Southern Australia
• Western Australia
   

The report has also provided a comprehensive analysis of all the major regional markets, which include Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, and Western Australia.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. Some of the major market players in Australia construction industry includes Laing O’Rourke, Lendlease Corporation, CIMIC Group, CPB Contractors, Hutchinson Builders, among many others.
• The construction industry across Australia is widely characterized by a small number of dominant key players who have a significant stake in the market, thereby making it both integrated and competitive. The CIMIC Group and Lendlease Group are primarily the most well-known private corporations in the Australian construction sector. Furthermore, leading companies in the market are shifting their preferences towards innovations and digitalization. Besides this, strategic collaborations among MIT and IBM, and Explore, a new global technology firm of the CIMIC Group, to elevate research and development (R&D) projects that will further enhance the advancements in the construction industry via the use of artificial intelligence (AI) and augmented reality technologies. The growing number of domestic engineering, procurement, and creation (EPC) organizations in Australia, most of which are well-established in mining-related activities and have extensive expertise working in remote locations, is also driving the market.

Australia Construction Market News

• October 2023: Perth’s Metro Inner-South Joint Development Assessment Panel approved the Grange Development project which would include the world’s tallest timber building, a “revolutionary” 50-storey hybrid design reaching a height of 191.2 meters. The developers are claiming that the building would be carbon negative, storing more carbon than it uses and will combine lightweight, durable, renewable glued laminated timber and cross-laminated timber with lower amounts of steel and concrete than conventional construction methods.
• November 2023: A new construction pathway by HTN, a group training organization, in partnership with Illawarra ITeC aims to train the tradespeople in the construction industry. The training is to be given for the development of 180,000 new homes in the next five years, while the forecast need is for 314,000 new homes in that period.
• March 2024: Australia's largest construction and design show is set to happen in May 2024 which would be focusing on the integration of numerous advanced technologies, such as Future Tech, AI and Robotics, HVACR, Architecture & Design stage, Digital Construction, Inclusion & Reconciliation stage, etc., in the construction industry. 

Australia Construction Market Report Coverage:

Key Questions Answered in This Report:

• How has the Australia construction market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the Australia construction market?
• What is the breakup of the Australia construction market on the basis of sector?
• What are the various stages in the value chain of the Australia construction market? 
• What are the key driving factors and challenges in the Australia construction?
• What is the structure of the Australia construction market and who are the key players?
• What is the degree of competition in the Australia construction market?

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Australia construction market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Australia construction market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Australia construction industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.