Australian Construction Price Outlook
Altus Group has combined market intelligence with robust data sources to provide an outlook on construction material price trends across Australia.
Key Highlights
- Price escalation expected to ease in 2025, with Queensland maintaining higher rates due to 2032 Olympic preparations.
- Geopolitical risks may impact commodity prices and construction costs, with uncertainty around Australia’s economic outlook.
- Labour-driven escalation remains high, though softening government demand is beginning to slow cost growth.
- Strategic investment in workforce development, innovation, and sustainability will be crucial in future-proofing the sector.
Economic Uncertainties and Market Impact
With a federal election approaching in 2025 and global geopolitical shifts—including China’s economic stimulus measures, potential trade tensions, and the US election—Australia’s economic trajectory remains uncertain.
China’s recent 10 trillion yuan (USD $1.4 trillion) stimulus plan presents a double-edged sword. A successful stimulus could boost demand for Australian iron ore and coal, driving higher material prices and construction costs. However, an oversupply of materials could result in price volatility and cheaper exports flooding the market.
Additionally, potential US-China trade tensions could disrupt global trade, adding further unpredictability to commodity prices.
Labour and Cost Trends
Labour costs continue to be a key driver of construction price escalation, although easing government demand may reduce pressure on cost growth.
To mitigate future risks, industry leaders are encouraged to invest in:
- Workforce development to address skill shortages.
- Innovation and technology to improve efficiency.
- Sustainability practices to reduce long-term costs and regulatory pressures.
Looking Ahead
While short-term price fluctuations are expected, the Australian construction sector remains resilient. Strategic planning and adaptation to global economic shifts will be key to navigating cost pressures and ensuring project viability.
