Australia Construction Market to Grow by 3.8 Percent in 2025

Strategic Insights -

The Australian construction industry is expected to grow by 3.8 percent in real terms in 2025, driven by investments in transport infrastructure, manufacturing, housing, and renewable energy projects. The federal government has unveiled a budget that increases general government expenditure from AUD762.8 billion in FY2024-25 to AUD785.7 billion in FY2025-26. However, rising insolvencies in the construction industry have weighed on its output, with the total number of companies undergoing insolvency appointments growing by 35.5 percent YoY in the first six months of 2025.

Key Takeaways:

  • The Australian construction industry is expected to grow at an average annual rate of 3.8 percent in 2025, supported by investments in transport infrastructure and renewable energy projects.
  • The federal government's FY2025-26 budget increases general government expenditure from AUD762.8 billion to AUD785.7 billion, providing a boost to the construction industry.
  • Rising insolvencies in the construction industry have weighed on its output, with the total number of companies undergoing insolvency appointments growing by 35.5 percent YoY in the first six months of 2025, following an annual increase of 18.9 percent in 2024.
  • The Northern Australia Action Plan (2024-29) will support growth in the industry over the forecast period, with an investment of AUD30 billion and an aim to improve affordable housing and transport infrastructure in Queensland, Western Australia, and the Northern Territory by 2029.
  • The Australian construction industry is expected to grow at an average annual rate of 3 percent from 2026 to 2029, supported by public and private sector investments in housing and transport infrastructure projects.

Statistics:

  • The Australian construction industry is expected to grow by 3.8 percent in 2025, driven by investments in transport infrastructure, manufacturing, housing, and renewable energy projects.
  • The federal government's FY2025-26 budget increases general government expenditure from AUD762.8 billion to AUD785.7 billion, a growth of 2.8 percent.
  • The total number of companies undergoing insolvency appointments in the construction industry grew by 35.5 percent YoY in the first six months of 2025, following an annual increase of 18.9 percent in 2024.
  • The Northern Australia Action Plan (2024-29) has an investment of AUD30 billion and aims to improve affordable housing and transport infrastructure in Queensland, Western Australia, and the Northern Territory by 2029.

Sources:

  • The "Australia Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2029 (Q2 2025)" report from ResearchAndMarkets.com.
  • The Australian Securities and Investments Commission (ASIC) report on insolvency appointments in the construction industry.
  • The Federal Government's FY2025-26 Budget.
  • The Northern Australia Action Plan (2024-29).