Construction Industry in Australia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

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.

Australia Construction Market Size

Australia Construction Market
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Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 172.29 Billion
Market Size (2029) USD 225 Billion
CAGR (2024 - 2029) 5.00 %
Market Concentration Low

Major Players

Major players in construction  industry  in Australia

*Disclaimer: Major Players sorted in no particular order

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Australia Construction Market Analysis

The Australia Construction Market size is estimated at USD 172.29 billion in 2024, and is expected to reach USD 225 billion by 2029, growing at a CAGR of 5% during the forecast period (2024-2029).

The huge investment flowing in the industry is driving the market. Furthermore, the industry is being driven by technological innovation and demand for prefabricated buildings.

  • The outlook for investment remains positive. A large pipeline of residential and non-residential projects is expected to sustain construction activity for at least the next year. However, the recent flow of data and information from the Bank's liaison program indicate that capacity constraints have intensified in some sectors, which will limit the pace of growth in construction activity for some time. The pipeline of private non-residential construction work yet to be done increased recently, reflecting additional commercial projects. By contrast, the outlook for dwelling investment has been downgraded. Demand for new detached dwellings is expected to be soft as a further decline in established housing prices and high construction costs reduce the incentive to build new dwellings. Prospects for higher-density residential projects are brighter, as rental vacancy rates in Sydney and Melbourne have declined and the population growth recovers following the reopening of the international border.
  • The Australian construction industry generates nearly 360 billion in revenue (9% of the country's Gross Domestic Product (GDP)) and has a projected annual growth rate of 2.4%. As of November 2021, the construction industry employed approximately 1,143,600 people. It employs approximately one in 10 workers, and this constitutes 8.7% of the total workforce. According to the construction industry statistics for the five years to November 2021, employment in the industry increased by 7.3%. The Australian Industry and Skills Committee states that although employment declined in 2020 and 2021, projections indicate that it will reach 1,263,900 by 2025. However, more optimistic predictions indicate an employment growth of 6.8% by November 2025.
  • The Australian government has a strong vision for developing smarter communities powered by cutting-edge technology solutions. Digital transformation has been placed at the heart of the government's economic strategy. New technologies in the construction industry are disrupting traditional models for planning, staffing, monitoring, and delivering projects as the physical world becomes increasingly digitized. Despite the obvious benefits, the construction industry is one of the slowest in the world to adopt new technologies and has had lower productivity gains compared to other sectors, such as manufacturing. Startups play an important role in digitizing the construction business. Investors are also interested in the possibilities they offer.
  • The sudden arrival of new buildings is altering the skylines. These new constructions are partially a result of prefabricated construction marvels, which allow for the production of big components off-site, shipping them to the construction site, and assembling them more quickly than would be possible with traditional bricklaying or other methods. Prefabrication combines manufacturing and building, resulting in a solution that combines the advantages of lower labor costs with high-quality output because the majority of prefabricated structures are created off-site in a tightly regulated environment. The knock-on impact of prefabrication may result in reduced mortgages, more homeowners, and reasonably priced rents by minimizing the cost of labor, materials, and site hours.

Australia Construction Market Trends

Increase in Non-Residential and Infrastructure Construction

Commercial building has been one of the strong contributing factors to the construction sector of Australia over the last couple of years and has recently reached new heights in terms of volume. In contrast to the residential building market, the value of construction in the non-residential segment has continued to grow. The investments in the non-residential sectors were focused on schools, hospitals, offices, warehouses, and hotels.

Since the Reserve Bank of Australia has promised to keep interest rates low for at least the next three years, it is estimated that construction costs would also remain low in 2023. According to industry experts and studies, the boom in non-residential construction in Australia has come to an end and will exhibit a negative growth rate for at least the next few years.

Australia has many country-owned EPC (engineering, procurement, construction) groups, which are well-established in the mining-related engineering construction sector. Major UK and US EPC companies that have long had a presence in the market include Bechtel, Fluor, Balfour & Beatty, and Laing O'Rourke. Commercial construction has been a star performer over the last couple of years; however, such above-average growth is expected to fall back to normal levels in the forecast period. Office buildings, education, and accommodation will contract significantly, and transportation, health, and retail will have more favorable projections. With government-led projects in the energy sector and transportation ramping up, the construction industry is optimistic about seeing a growth rate during the forecast period.

Australia Construction Market: Value of Non-Residential Construction Work Done, Australia, in USD Billion, from 2017 to 2022

Increasing Prefabricated Housing In Australia Driving The Construction Sector

Prefabricated housing is mainly driven by the demand for low to mid-rise residential buildings, project homes, and public housing. Increasing awareness about prefabricated building benefits, such as reduced material waste and less disruption to the surrounding environment, is driving market growth. Revenue in the prefabricated building industry is expected to grow as the rising demand from the government and education sectors has supported the industry during the COVID-19 pandemic. Furthermore, the Australian construction industry has faced severe challenges over the past two decades.

High-quality, lightweight, prefabricated modular systems are expected to contribute to housing stock with excellent amenities for occupants at a substantially lower cost when compared with traditional housing. With Australia's population growth expected to see a 60% increase to 37.6 million people by 2050, the industry needs to look to more cost-effective and well-designed inner-city developments at higher densities. Prefabricated housing is a next-generation housing construction industry, a game-changer in the cost of housing, competitiveness, efficiency, and productivity.

Prefabricated building systems and construction hold a high potential to improve the efficiency and performance of the Australian construction industry in a more sustainable sense. With the market just opening up in the building industry, generating trust and investments in the technology, the market is open to ample opportunities and can witness strong growth in the coming years.

Australia Construction Market: Gross value added (GVA) by the Construction Industry, Australia, in USD Million, from  2017 to 2022

Australia Construction Industry Overview

The Australian construction market is partially consolidated and highly competitive, with a few players occupying the major share. In terms of private companies, the Lendlease Group and CIMIC Group are two of the biggest names in Australia's construction industry. Major players in the market are moving toward innovation and digitalization. Explore, a new global technology company of the CIMIC Group, is jointly undertaking a series of research projects, partnering with MIT and IBM, contributing to the research and development of artificial and augmented intelligence related to the construction industry. Australia has numerous home-grown EPC (engineering, procurement, creation) groups that are mainly well set up within the mining-associated engineering creation sector. However, a number of them additionally have massive distant places undertaking experience.

Australia Construction Market Leaders

  1. Laing O’Rourke

  2. Hutchinson Builders

  3. CPB Contractors

  4. Lendlease Corporation

  5. CIMIC Group

*Disclaimer: Major Players sorted in no particular order

Australia Construction Market Concentration
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Australia Construction Market News

  • 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.

Australia Construction Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Economic and Construction Market Scenario

    2. 4.2 Technological Innovations in the Construction Sector

    3. 4.3 Construction Costs

    4. 4.4 Impact of Government Regulations and Initiatives on the Industry

    5. 4.5 Key Production, Consumption, Exports and Import Statistics of Construction Materials

    6. 4.6 Spotlight on Prefabricated Buildings Market in Australia

    7. 4.7 Insights on Key Distributors/Traders

    8. 4.8 Impact of COVID-19 on the market

  5. 5. MARKET DYNAMICS

    1. 5.1 Drivers

      1. 5.1.1 Government Initiatives is driving the market

      2. 5.1.2 Increase In Residential Sector

    2. 5.2 Restraints

      1. 5.2.1 Supply chain issues and rising material costs

      2. 5.2.2 Rising labor costs and labor shortages

    3. 5.3 Opportunitites

      1. 5.3.1 Technological Innovations

    4. 5.4 Value Chain / Supply Chain Analysis

    5. 5.5 Industry Attractiveness - Porter's Five Force Analysis

      1. 5.5.1 Bargaining Power of Suppliers

      2. 5.5.2 Bargaining Power of Consumers / Buyers

      3. 5.5.3 Threat of New Entrants

      4. 5.5.4 Threat of Substitute Products

      5. 5.5.5 Intensity of Competitive Rivalry

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Sector

      1. 6.1.1 Residential

      2. 6.1.2 Commercial

      3. 6.1.3 Industrial

      4. 6.1.4 Infrastructure

      5. 6.1.5 Energy and Utilities

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Market Concentration Overview

    2. 7.2 Company Profiles

      1. 7.2.1 CPB Contractors

      2. 7.2.2 Lendlease Corporation Limited

      3. 7.2.3 Laing O'rourke

      4. 7.2.4 John Holland Group

      5. 7.2.5 Cimic Group Limited

      6. 7.2.6 Hutchinson Builders

      7. 7.2.7 Ugl Limited

      8. 7.2.8 Adco Constructions

      9. 7.2.9 Fulton Hogan

      10. 7.2.10 Thiess Pty Ltd*

    3. *List Not Exhaustive
  8. 8. MARKET OPPORTUNITIES AND FUTURE TRENDS

  9. 9. APPENDIX

    1. 9.1 Marcroeconomic Indicators (GDP Breakdown by Sector, Contribution of Construction to Economy, etc.)

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Australia Construction Industry Segmentation

Civil construction is a subset of civil engineering, which is concerned with the design, construction, and maintenance of the physical and naturally built environment. The art of building bridges, dams, roads, airports, canals, and buildings is known as civil construction.

A complete background analysis of the Australia Construction Market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact, is covered in the report. The Australia Construction Market is segmented by Sector (Residential, Commercial, Industrial, Infrastructure (Transportation), Energy, and Utilities). The report offers market size and forecasts for the Australia Construction market in value (USD) for all the above segments.

By Sector
Residential
Commercial
Industrial
Infrastructure
Energy and Utilities
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Australia Construction Market Research FAQs

The Australia Construction Market size is expected to reach USD 172.29 billion in 2024 and grow at a CAGR of 5% to reach USD 225 billion by 2029.

In 2024, the Australia Construction Market size is expected to reach USD 172.29 billion.

Laing O’Rourke, Hutchinson Builders, CPB Contractors, Lendlease Corporation and CIMIC Group are the major companies operating in the Australia Construction Market.

In 2023, the Australia Construction Market size was estimated at USD 163.68 billion. The report covers the Australia Construction Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Australia Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

The major trends influencing the Australia Construction Market are a) Increase in non-residential and infrastructure construction b) Adoption of prefabricated housing, and government-led projects in the energy and transportation sectors

Australia Construction Industry Report

The Australian construction market is in a vibrant phase of growth, driven by infrastructure development and investments in diverse sectors like housing, renewable energy, and education. This growth is propelled by Australian construction companies leveraging innovative techniques such as dry construction and navigating challenges like rising material costs. The market spans various sectors, with residential construction leading and commercial and industrial sectors poised for varied growth due to investor confidence. A dynamic competitive landscape, featuring both domestic and international players, fosters an evolving ecosystem. Supported by significant investments and innovations like prefabricated buildings, Australian construction companies are emerging as global leaders. The future of the market looks promising, focusing on sustainability, efficiency, and productivity, underscored by technological advancements. Mordor Intelligence™ Industry Reports provide insights into the market's share, size, and revenue growth rate, offering a forecast outlook and historical overview, available as a free report PDF download, highlighting the sector's potential for continued expansion.

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Construction Industry in Australia Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)