Australia Q2 Construction Output Unexpectedly Falls

Total construction work in Australia declined 2.1% quarter-on-quarter to AUD 82,515.9 million in Q2 2026, reversing an upwardly revised 4.3% expansion in the previous quarter and defying market expectations for a 0.5% increase. It marked the first contraction since Q3 2025, driven largely by a sharp downturn in engineering work, which fell 6.0% after surging 7.4% in Q1, to AUD 36,672.2 million. Meanwhile, building construction growth eased to 1.3% from 1.7%, reaching AUD 45,843.7 million. Non-residential building slowed sharply, rising just 0.5% after a 3.4% gain in the prior quarter, although residential construction accelerated to 1.7% from 0.6%. Regionally, activity fell sharply in Western Australia (-19.7%), followed by Tasmania (-9.5%) and the Australian Capital Territory (-8.8%). In contrast, construction output expanded in Victoria (5.8%), Northern Territory (2.7%), South Australia (1.6%), New South Wales (1.4%), and Queensland (1.1%).

Total construction work in Australia grew by 3.4% quarter-on-quarter to A$83,360.6 million in Q1 2026, surpassing market expectations of a 0.8% increase and the previous period’s revised 0.2% rise. The increase also marked the sharpest since the first quarter of 2023, largely driven by a 6.9% increase to A$38,652 million in engineering works. Additionally, building activity rose 0.6% to A$44,708.6 million, with a 6.9% gain in non-residential constructions, while residential projects declined 0.6%. Regionally, construction activity increased in Western Australia (+30.6%), Tasmania (+5.5%), and Queensland (+2.1%). In contrast, output decreased in Northern Territory (-13.3%), Australian Capital Territory (-10.3%), Victoria (-5%), South Australia (-1%), and New South Wales (-0.7%). On an annual basis, overall construction activity rose by 6.3% in Q1, marking the strongest growth since December 2023 and accelerating from a 3.2% gain in the preceding period.

Total construction work in Australia fell 0.1% quarter-on-quarter to A$80,011.8 million in Q4 2025, missing market expectations for a 0.9% increase and marking a second straight quarterly decline after a 0.7% drop in Q3. The contraction was largely driven by a sharp pullback in engineering work, which slid 1.3% to A$35,908.4 million amid softer infrastructure-related activity. By contrast, building activity expanded, with total building work up 0.9%, including a 1% rise in residential construction and a 0.7% gain in non-residential projects. Regionally, construction activity declined in the Australian Capital Territory (-16.3%), Northern Territory (-11.4%), Western Australia (-1.7%), and Queensland (-1.1%). Meanwhile, output increased in South Australia (2.3%), New South Wales (1.5%), Victoria (0.9%), and Tasmania (0.3%). On an annual basis, overall construction activity rose 3% in Q4, accelerating slightly from a 2.9% increase in Q3.