Australia’s building and construction industry is currently experiencing an acceleration in cost inflation, which should peak during the next 12 months. The cost inflation burst is expected to be relatively short-lived, with the rate of increase in costs expected to drop back to more normal rates, in most segments, by the end of next year (2022).

The current trend is relatively consistent across the various segments of construction. The peak in annual cost inflation is expected to be between 6% and 8% across almost all building and construction segments. The peak in the house building sector is likely to be around the current time (September quarter), while the peak in other areas, such as non-residential building and roads, is expected in the first half of next year.