Australia Q2 Construction Activity Rebounds Sharply

Total construction work in Australia dropped by 0.7% quarter-on-quarter in Q3 2025, missing market expectations for a 0.4% rise and reversing a marginally revised 2.9% growth in the previous period. The downturn was driven primarily by a sharp drop in engineering work (-5.8% vs 5.5% in Q2), reflecting weaker infrastructure-related activity. In contrast, building construction strengthened (4.0% vs 0.8%), with both non-residential building (3.7% vs 0.7%) and residential work (4.2% vs 0.1%) posting solid gains. Regionally, construction activity declined in Victoria (-2.5%), Western Australia (-1.2%), Tasmania (-3.3%), and the Northern Territory (-2.4%). In contrast, solid growth was recorded in New South Wales (5.7%), Queensland (5.9%), and South Australia (14.0%), underscoring uneven momentum across states. On an annual basis, construction activity grew 2.9%, easing from a 4.5% rise in Q2.

Total construction work in Australia rose 3.0% quarter-on-quarter in Q2 2025, strongly recovering from a downwardly revised 0.3% decline in Q1 and easily exceeding market expectations of 0.7% growth. The increase was driven by a strong recovery in engineering work (6.1% vs -1.5% in Q1) and a modest rebound in non-residential building (0.3% vs -0.3%). In contrast, growth slowed in building construction (0.2% vs 0.8%) and residential activity (0.1% vs 1.4%). Regionally, gains were recorded in South Australia (1.6%), Tasmania (2.4%), the Northern Territory (344.8%), and the Australian Capital Territory (17.5%), while declines were seen in New South Wales (-1.7%), Victoria (-1.5%), Queensland (-1.6%), and Western Australia (-1.5%). On an annual basis, total construction activity expanded 4.8%, picking up from 3.0% in Q1.

Total construction work done in Australia was flat at AUD 74.43 billion in Q1 2025, following an upwardly revised 0.9% increase in the previous quarter and falling short of market expectations for a 0.5% rise. Growth in building construction (0.9% vs 0.1% in Q4 and) and the residential sector (1.6% vs 1.6%) was offset by declines in engineering work (-1.0% vs 1.7%) and non-residential output (-0.1% vs -2.2%). Geographical-wise, construction work done increased in Queensland (1.5%), South Australia (6.7%), and Western Australia 2.0%); but fell in New South Wales (-1.3%), Victoria (-1.1%), Tasmania (-4.3%), Northern Territory (-21.6%), and Australian Capital Territory (-2.0%). On an annual basis, construction activity grew by 3.5%, accelerating from a 1.9% increase in Q4.