Australian Construction Outlook – Non-Residential Building

Non-residential building activity has been booming across Australia in recent years, driven in particular by the office, education, warehouse, and short-term accommodation sectors. This upturn has now come to an end, with a prolonged 6-year downswing cycle set to take place.

While a downturn was anticipated prior to the outbreak of COVID-19, the pandemic has had its influence on the outlook by exacerbating weaknesses in some areas, but also by inspiring governments to fast-track approvals and spend more on building works themselves. This means that while private sector work done is forecast to decline in the near term, it will be offset to some extent by a temporary boost in public sector funded works.

All said, the sectors responsible for much of the downturn over the next few years will be the same sectors that led during the boom. This includes activity associated with education buildings. Meanwhile, the major growth sectors helping to support activity in the short term are health, transport, and non-residential buildings not elsewhere classified (e.g., prisons, military bases, etc.).