The national construction industry is expected to continue expanding through 2026, supported by strong demand across several major sectors. Infrastructure projects, housing development, defence investment, and renewable energy initiatives are all contributing to the industry’s ongoing growth.
Analysis by Planned Resources suggests that the overall outlook for construction remains positive despite a number of challenges. Labour shortages, rising costs, and uncertain economic conditions continue to affect project feasibility and delivery timelines.
Demand for construction services is being driven by large scale infrastructure investments across the country. Governments are investing heavily in transport networks, energy systems, and defence facilities, creating significant opportunities for contractors and developers.
Housing demand also plays a central role in the industry’s expansion. Population growth and ongoing migration continue to create the need for new residential developments in many regions.
New South Wales is expected to remain one of the busiest construction markets, particularly in Sydney. The state has a substantial pipeline of both public and private projects, including major mixed use developments and infrastructure upgrades.
However, construction costs in Sydney are forecast to increase by approximately 4%, creating additional challenges for project delivery. Rising material prices and labour constraints have made it more difficult for some developments to remain financially viable.
Planning processes can also affect project timelines. Approval delays, regulatory requirements, and infrastructure connections often extend construction schedules for high density developments.
Victoria faces similar challenges within its construction sector. Labour shortages and contractor insolvencies have affected the industry’s capacity to deliver projects efficiently. These issues can disrupt construction schedules and increase financial risks for developers.
Queensland, on the other hand, is expected to experience one of the most dynamic construction environments in the country. The state has a strong pipeline of infrastructure developments along with significant housing demand.
Large projects associated with the energy sector are also contributing to regional construction activity. Worker accommodation villages are being developed to support major renewable energy and resource projects, particularly in regional areas.
These developments not only support energy infrastructure but also stimulate economic activity in surrounding communities.
Western Australia is predicted to lead the national construction sector in 2026. Housing approvals and building commencements have surged, positioning the state as a frontrunner for new residential construction.
Strong population growth, combined with economic activity linked to resources and infrastructure, has created favourable conditions for housing development.
Perth is expected to see construction costs rise by around 5.3%, reflecting both high demand and limited labour availability. Despite these pressures, the scale of development activity suggests the construction sector will remain highly active.
Across the country, the combination of infrastructure investment, housing demand, and economic growth is likely to sustain construction industry expansion.
Although challenges remain, the outlook indicates continued opportunities for builders, developers, and investors involved in residential and infrastructure projects.
