Engineering construction in Australia – Q4 2024 update

Access the research report to learn more about the key points outlined below:

• Engineering construction work done rose 5.8% year-on-year to $33.5bn over the June 2024 quarter, driven by strong growth in utility and mining work. We forecast activity to grow 9.3% in FY25 to $135.8bn (constant FY22 prices), supported by the ongoing rebound in mining investment and continued work to decarbonise the electricity network. Overall, we expect activity to average $130.7bn per annum over the five years to FY29. 

• The government funded transportation infrastructure boom continues to support growth in engineering construction activity. Annual growth slowed to 6.4% over FY24 to be $34.9bn, the highest level on record. We expect activity to reach a cyclical peak of $36.9bn in FY26. 

• The construction sector continues to struggle with labour shortages. The wage price index for construction workers increased 3.9% over the year to June 2024, the largest financial year increase in a decade. 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.