Australia's construction industry is a booming behemoth, injecting over a quarter of a trillion dollars into the economy, but behind the staggering AUD 260.5 billion in annual work done and its critical 9.1% GDP contribution lies a complex story of record-breaking infrastructure, a transformative push toward sustainability, and an urgent battle with skills shortages and an ageing workforce.
Key Takeaways
- In 2022-23, the total value of construction work done in Australia reached AUD 260.5 billion, a 4.5% increase from the previous year
- The construction industry's contribution to Australia's GDP was 9.1% in 2022, equating to AUD 262 billion in value added
- Residential building construction accounted for 37% of total construction activity in 2022-23, valued at AUD 96.4 billion
- Construction employment reached 1.2 million people in November 2023, representing 8.9% of total employment
- The construction industry employed 1,166,600 persons in August 2023, a 2.5% increase year-on-year
- Average weekly earnings in construction were AUD 2,112 in May 2023, 25% above the all-industries average
- Residential building approvals in New South Wales totalled 45,200 in 2022-23, up 5%
- Victoria's house approvals reached 38,900 units in 2022-23, a 10.2% decline from prior year
- Queensland saw 32,100 dwelling commencements in 2022-23, driven by population growth
- The Sydney Metro West project is valued at AUD 25 billion, with 23km of new rail line
- Melbourne Airport Rail Link (MARL) budgeted at AUD 13 billion, set for 2029 completion
- Western Sydney Airport construction commenced in 2023, total cost AUD 11 billion
- The lost time injury frequency rate (LTIFR) in construction was 1.8 per million hours worked in 2022
- Construction sites reported 25 fatal incidents in 2022, 28% of all work-related deaths
- 42% of construction businesses implemented green building practices in 2023
Australia's construction sector continues growing strongly, driven by residential and major infrastructure projects.
Economic Performance
- In 2022-23, the total value of construction work done in Australia reached AUD 260.5 billion, a 4.5% increase from the previous year
- The construction industry's contribution to Australia's GDP was 9.1% in 2022, equating to AUD 262 billion in value added
- Residential building construction accounted for 37% of total construction activity in 2022-23, valued at AUD 96.4 billion
- Non-residential construction work done grew by 6.8% to AUD 121.1 billion in 2022-23
- Engineering construction saw a 3.2% rise to AUD 43 billion in 2022-23, driven by infrastructure projects
- The Australian construction market size was estimated at USD 198.5 billion in 2023, projected to reach USD 248.2 billion by 2028 at a CAGR of 4.5%
- In FY2023, construction sector revenue reached AUD 361.4 billion, up 5.2% from FY2022
- Building approvals for dwellings increased by 2.1% to 170,393 in 2022-23
- Total construction investment is forecast to grow at an average annual rate of 2.8% over the next five years to FY2028
- The value of work commenced in construction rose 12.4% to AUD 278.2 billion in 2022-23
- In 2022-23, New South Wales construction work done was AUD 78.2 billion, up 5.1%
- Victoria's construction output hit AUD 72.4 billion in 2022-23, growing 3.8%
- Queensland construction value added AUD 52.1 billion to GDP in 2022
- South Australia's construction sector revenue was AUD 18.9 billion in FY2023
- Western Australia's mining-related construction peaked at AUD 45.3 billion in 2022-23
- Construction inflation rate was 6.2% in 2023, driven by labour and material costs
- Private sector construction investment rose 7.3% to AUD 145 billion in 2022-23
- Public sector construction expenditure totalled AUD 115.5 billion in FY2023
- Construction GDP growth forecast at 2.9% for 2024
- Total factor productivity in construction improved by 0.8% in 2022
- Tasmania construction work done AUD 6.8 billion in 2022-23
- Northern Territory mining construction AUD 4.2 billion peak in 2023
- ACT building approvals 2,100 dwellings in 2022-23
- Construction exports services valued AUD 12.5 billion in 2022
- RBA cash rate impacts led to 3.1% contraction in residential in Q4 2023
- Supply chain disruptions added 8% to project costs in 2023
- Steel price index for construction rose 15% in 2023
- Contractor insolvencies hit 2,400 in 2023, up 25%
- Digital adoption rate 72% for project management software
Economic Performance Interpretation
While Australia’s construction industry is busy building a quarter-trillion dollar GDP contribution, it’s currently walking a tightrope between booming infrastructure projects and the very real wobbles of rising insolvencies, soaring costs, and interest rate headwinds.
Employment and Workforce
- Construction employment reached 1.2 million people in November 2023, representing 8.9% of total employment
- The construction industry employed 1,166,600 persons in August 2023, a 2.5% increase year-on-year
- Average weekly earnings in construction were AUD 2,112 in May 2023, 25% above the all-industries average
- There were 9.3 job vacancies per 100 employed persons in construction in August 2023, the highest of any industry
- Construction workforce participation rate was 62.4% in 2023, with 1.3 million employed full-time
- Women comprised only 12% of the construction workforce in 2023, up from 10% in 2018
- Apprentices and trainees in construction numbered 90,200 in 2022, accounting for 13% of the workforce
- Labour productivity in construction declined by 1.2% in 2022-23 to AUD 178,000 per worker
- Over 250,000 construction workers were aged 45+ in 2023, highlighting an ageing workforce issue
- Unemployment rate in construction was 3.4% in November 2023, below the national average of 4.3%
- Underemployment in construction stood at 5.2% in 2023
- Migrant workers made up 28% of construction employment in major cities in 2023
- Construction manager roles saw 15,200 vacancies in Q3 2023
- Part-time employment in construction was 14% of total jobs in 2023
- Youth (15-24) employment in construction reached 180,000 in 2023
- Indigenous employment in construction increased to 4.5% of workforce in 2022
- Overtime hours averaged 4.2 per week in construction in 2023
- Labour turnover rate in construction was 18% in 2022-23
- Skilled migration visas for construction trades totalled 12,500 in 2023
- Wage growth in construction was 4.6% year-on-year in November 2023
- Construction output per hour worked AUD 85 in 2023
- Electrician shortages 22,000 nationally in 2023
- Bricklayers employment grew 6% to 45,000 in 2023
- Female apprentices doubled to 18,000 in five years to 2023
- Remote work in construction admin roles 15% in 2023
- Union membership in construction 32% in 2023
- Carpenters average salary AUD 95,000 pa in 2023
- Labour hire workers 25% of construction workforce
- Retraining programs for 50,000 workers by 2025 announced
- Shift work prevalent in 40% of construction jobs
Employment and Workforce Interpretation
Australia's construction industry is booming with record employment and enviable wages, yet it's hobbled by a maddening paradox: despite being flooded with cash and desperate for nearly ten people per hundred jobs, it can't build its way out of a deepening hole of labour shortages, aging workers, and stubbornly poor productivity.
Infrastructure Projects
- The Sydney Metro West project is valued at AUD 25 billion, with 23km of new rail line
- Melbourne Airport Rail Link (MARL) budgeted at AUD 13 billion, set for 2029 completion
- Western Sydney Airport construction commenced in 2023, total cost AUD 11 billion
- Snowy 2.0 hydroelectric project valued at AUD 12.1 billion, generating 4,000MW power
- Brisbane 2032 Olympics infrastructure spend projected at AUD 8.9 billion for venues
- Inland Rail project spans 1,700km with AUD 14.5 billion investment
- North East Link in Melbourne costs AUD 26.1 billion, including 6.5km twin tunnels
- Suburban Rail Loop East stage 1 at AUD 26 billion, 26km automated rail
- AUD 120 billion federal infrastructure pipeline announced for 2023-24 to 2027-28
- Road upgrades under National Road Safety Strategy total AUD 7.2 billion by 2025
- Cross River Rail in Brisbane costs AUD 6.5 billion, with 10 new stations
- METRONET in Perth valued at AUD 10.1 billion, expanding rail network
- F6 extension in Sydney AUD 3.9 billion for 9km motorway
- M80 Ring Road upgrade AUD 1.2 billion in Melbourne
- Bruce Highway upgrades AUD 17.5 billion committed to 2028
- Canberra light rail stage 2 AUD 1.9 billion for 3.6km extension
- AUD 20 billion National Housing Accord targets 1.2 million new homes by 2029
- Pacific Highway duplication completed 400km at AUD 4.9 billion
- West Gate Tunnel Project AUD 9.7 billion with 9km twin tunnels
- Sydney Gateway road project AUD 410 million completed 2023
- Airport Link Tunnel upgrade AUD 1.1 billion in Brisbane
- Gateway WA rockfalls AUD 1.2 billion freight corridor
- Torrens to Darlington rail AUD 1.4 billion in SA
- Newcastle Interchange AUD 600 million transport hub
- AUD 50 billion infrastructure grants to states 2023-28
- Great Ocean Road coastal upgrades AUD 180 million
- Digital connectivity fibre rollout AUD 3.5 billion construction
Infrastructure Projects Interpretation
Australia's construction industry is not just building infrastructure; it's conducting a symphony of colossal ambition where the sheet music is written in billions, the tempo is set by deadlines, and the occasional cost overrun is merely a dramatic pause for effect.
Sector Breakdown
- Residential building approvals in New South Wales totalled 45,200 in 2022-23, up 5%
- Victoria's house approvals reached 38,900 units in 2022-23, a 10.2% decline from prior year
- Queensland saw 32,100 dwelling commencements in 2022-23, driven by population growth
- Commercial office construction in major cities totalled AUD 15.2 billion in 2023
- Retail construction projects valued at AUD 8.7 billion were completed in 2022-23
- Industrial and logistics warehousing space under construction hit 2.5 million sqm in 2023
- Multi-residential dwellings accounted for 28% of new approvals, with 47,800 units in 2022-23
- Detached house construction made up 55% of residential work, valued at AUD 53 billion
- Health and aged care construction reached AUD 12.4 billion in 2022-23
- Education building projects totalled AUD 9.8 billion nationally in FY2023
- Alterations and additions to dwellings valued AUD 24.1 billion in 2022-23
- Hotels and motels construction totalled AUD 4.2 billion in 2023
- Manufacturing facilities construction reached AUD 6.8 billion
- Transport infrastructure construction was AUD 28.4 billion in 2022-23
- Utilities construction (water, sewerage) valued AUD 14.7 billion
- Data centres under construction totalled 500,000 sqm in 2023
- Social housing approvals rose 15% to 12,300 dwellings in 2022-23
- Apartments and units commencements were 76,500 in 2022-23
- Rural residential construction grew 8% to AUD 5.6 billion
- Sports and recreation facilities construction AUD 3.9 billion in FY2023
- Semi-detached dwellings 12% of residential approvals
- Hospital construction AUD 7.9 billion in 2022-23
- Warehouse developments 1.8 million sqm completed 2023
- Renewable energy construction AUD 18.2 billion
- Defence facilities projects AUD 5.4 billion
- Office fit-outs market AUD 3.2 billion in CBDs
- Heritage renovations AUD 2.1 billion nationally
- Childcare centres construction up 28% to AUD 1.8 billion
- Supermarket expansions AUD 1.5 billion
- Battery storage projects 2GW under construction 2023
Sector Breakdown Interpretation
In Australia's construction landscape, it seems we are building everything from humble homes to vast warehouses with fervent energy, yet the real story is a nation frantically trying to outpace itself by simultaneously constructing its future, its present, and its backup plan.
Sustainability and Safety
- The lost time injury frequency rate (LTIFR) in construction was 1.8 per million hours worked in 2022
- Construction sites reported 25 fatal incidents in 2022, 28% of all work-related deaths
- 42% of construction businesses implemented green building practices in 2023
- Embodied carbon in construction materials reduced by 15% in certified green projects in 2022
- Renewable energy integration in construction sites reached 35% by 2023
- Waste diversion rate from landfills in construction hit 76% in major projects in 2022-23
- Modular construction adoption grew 22% in 2023, reducing site waste by 30%
- BIM (Building Information Modelling) usage in large projects was 68% in 2023
- Construction carbon emissions totalled 25% of national emissions in 2022
- Safety training hours per worker averaged 24 hours annually in 2023
- Construction serious claims rate was 14.2 per million hours in 2022
- 65% of construction firms achieved NABERS 4.5+ energy ratings in 2023
- Prefabrication reduced construction time by 25% in 40% of projects in 2023
- Water usage efficiency improved 22% in green-certified buildings
- EV charging infrastructure in new builds mandated in 30% of states by 2023
- Mental health programs adopted by 55% of large contractors in 2023
- Timber use in high-rise construction up 18% with mass timber tech
- Digital twin technology implemented in 25% of mega projects
- Heat stress incidents reported up 12% in summer 2022-23
- Net-zero construction commitments by 50 major firms by 2050
- Hazardous manual tasks caused 35% of injuries in 2022
- Green leases in commercial builds 45% in 2023
- 3D printing used in 5% of housing projects, cutting costs 20%
- Solar PV installations on sites 1.2GW capacity 2023
- Biodiversity net gain policies in 20% of projects
- AI for safety monitoring in 15% of large sites 2023
- Recycled content in concrete averaged 18% in 2023
- Drone surveys reduced site visits 40% in mega projects
- Musculoskeletal disorders 48% of claims in 2022
- Zero waste to landfill achieved in 12% of projects 2023
Sustainability and Safety Interpretation
Australia’s construction industry, while steadily building a smarter, greener future, is still fighting to lay a safer foundation for its people, tragically losing a worker almost every fortnight and accounting for a quarter of the nation’s emissions.
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