Australia: Construction market continues on its steady 2025 path

RICS Australia Construction Monitor, Q2 2025

The Royal Institution of Chartered Surveyors (RICS) has released its latest Global Construction Monitor, highlighting a strong and resilient outlook for the Australian construction industry in 2025, with sentiment holding firm despite ongoing challenges of lack of skilled workers, competition, profitability, financial constraints and cost of materials.

According to the survey, the Construction Sentiment Index (CSI) remains strong at +9, matching the robust confidence levels recorded in the first quarter of 2025 (+8). Workloads for private residential came back a bit from the strong +12 reading for Q1 2025 recording +5 for the second quarter of the year. Private non-residential continued into negative territory recording -8 and infrastructure and public works edging slightly further into positive territory to +4 from +2.

Looking more closely at infrastructure, ICT continued to strengthen to +17, with energy projects continuing to be very strong with +27, followed by water and waste which recorded +6, with social and transport remaining in positive territory and steady. Unfortunately agribusiness continued its decline to -19.

Expectations for the next 12 months remain positive across all main sectors with private non-residential continuing to strengthen to +18 consistent with increased confidence being recorded in this sector. A net balance of +28 of respondents expect infrastructure workloads to rise, with private residential and infrastructure/public works each projected to grow by +27 and +28.

The continuing issue of skills shortages particularly for skilled tradespeople (+61), quantity surveyors (+57), and managers (+50) remains a significant constraint holding back the sector with potential future reforms to address this issue expected to be unveiled by the federal Productivity Commission shortly.

In positive news credit conditions are expected to ease into the future including the next three and twelve month timeframe.

Vishant Narayan FRICS, member of the RICS Australasia Regional Advisory Board:

"This quarter’s Construction Sentiment Index shows encouraging signs of strength across Australia’s construction sector. Yet, the relentless demand for housing and infrastructure continues to place extraordinary pressure on the industry.  This requires urgent attention.

"Productivity reforms are essential to tackling the sector’s challenges —particularly closing the skills gap. Building a resilient, adaptable workforce will shape the future of Australia’s construction industry."