Economic growth is expected to decrease from 1.8% in 2023 to 1.4% in 2024, before recovering to 2.1% in 2025. Elevated interest rates and cost of living will continue to impact private consumption. A strong working-age population growth and a recovery in export levels will partially offset these obstacles.

Specific to the construction market, the industry continues to suffer from persistent labour shortages with select materials being impacted locally. While there has been a modest easing of conditions in the labour market, the availability of skilled tradespeople remains constrained, particularly within critical trades. Moreover, the prevailing market sentiment has shifted its focus from immediate pricing concerns to uncertainties surrounding future sector growth and diversification of projects outside of traditional sectors.

Key growth drivers include infrastructure, energy and utilities, data centres, and the industrial sector. However, a decline in construction output is anticipated in 2024 due to elevated interest rates, high construction costs, labour shortages, and a downturn in residential construction.

With escalating costs of both materials and labour within critical trades, contractors are proactively incorporating substantial contingencies into their pricing strategies. This proactive approach is aimed at mitigating potential unforeseen risks and has been consistently observed as a prevalent strategy in response to the current market conditions.

Detailed data for each Australian state can be found in the 2024 Handbook & Cost Guide.