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Surging activity in key sectors to push construction work done higher
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Macromonitor has recently published fully revised forecasts of building and construction activity. These show the current construction upturn is set to continue for two to three more years. A number of sectors are experiencing upturns, including some unprecedented booms (in renewable energy and data centres) along with some more normal upturns. These upturns, combined with stable levels of activity at reasonably high levels in other areas (such as road and rail), will lead to solid growth in overall work done, from already very high levels.
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The key areas that are seeing large increases in work, as shown in the chart below, include residential apartments, renewable energy, hospitals, data centres and entertainment & recreation (stadiums).
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Activity in these sectors will not keep rising forever, and when work inevitably slows, total construction activity will fall as well. While we forecast a downturn to occur from 2029, activity will remain high compared to historical levels even after this point, as other sectors such as road, rail and water infrastructure are forecast to remain strong.
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The key reasons behind the construction upturn in each sector are as follows:
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- Residential Apartments: Strong occupant demand due to high overseas migration and, in the case of Queensland, interstate migration. Affordability improving the attractiveness of higher density dwellings, new sources of finance (such as build-to-rent), and government housing initiatives stimulating activity.
- Renewable Energy: Australia's renewable energy transition involves a vast buildout of generation assets (solar, wind, hydro and batteries) and new transmission infrastructure.
- Hospitals: As a form of economic stimulus in response to COVID-19 and to support growing populations, all state governments have committed to building new and upgrading existing hospitals.
- Data Centres: As AI adoption increases, data centres are becoming critical infrastructure, with Australia positioning to become a key player in the Asia Pacific region. Data centre construction is currently the fastest growing building and construction sector in Australia in percentage terms.
- Entertainment & Recreation: In preparation for the Brisbane 2032 Olympics, new stadiums and venues are set to begin construction from 2026/27. The Macquarie Point Stadium in Tasmania is also forecast to commence at the same time.
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Contact us at info@macromonitor.com.au if you are interested in purchasing a report that provides more information on the outlook for any of these sectors.
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Our most recent reports:
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Australian Construction Cost Trends
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This report examines the outlook for construction costs, in detail be sector and type of input.
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Australian Construction Projects Database
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This latest list of projects corresponds with our fully revised set of forecasts published in November 2023.
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Australian Regional Construction Outlook
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Our latest regional forecasts for residential building and construction have just been released.
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Australian Construction Materials Forecasts
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Our latest forecasts assess the implications for construction materials demand of the current outlook for building and construction.
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Australian Road and Bridge Works
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This report examines the strength and composition of the current upturn, and determines the likely timing of the peak, and subsequent decline.
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