Engineering Construction in Australia – Q2 2025 Update
Headline engineering construction work done rose 4.7% year-on-year to $36.5bn over the December 2024 quarter, driven by strong growth in utility and mining work. We forecast activity to grow 7.6% in FY25 to $144.5bn (constant FY23 prices), supported by the ongoing rebound in mining investment and continued work to decarbonise the electricity network. Overall, we expect activity to average $145.0bn per annum over the five years to FY29.
The government funded transportation infrastructure boom is approaching a peak. Annual growth slowed to 1.2% over CY24 to be $37.9bn, pulled down by a weak December quarter. We expect activity to reach a cyclical peak of $39.2bn in CY25.
The construction sector continues to struggle with labour shortages. The wage price index for construction workers increased 3.5% over the year to September 2024. While strong migration levels will help alleviate some shortages on some projects, we expect labour capacity to remain constrained given the strong pipeline of work, and so we anticipate wage growth to remain strong over the near-term.
