RICS has released the Q1 2026 Global Construction Monitor, which confirms that headline construction activity is remaining relatively steady, with the Construction Sentiment Index moving from +7 to +8.
Importantly, however, the sector is also recording material cost pressures rising markedly with 12-month cost projections rising sharply across the board.
Credit conditions outlook is also deteriorating sharply, with infrastructure expectations remaining a relatively bright spot.
From an Australian perspective, the impact of the conflict in the Middle East is taking its toll, with the Construction Sentiment Index moving from +21 to +11, with the cost of materials and credit conditions moving sharply negative.
Current workloads all moved backwards with private residential moving from +16 to +3, private non-residential moving from +11 to -6 and infrastructure / public works stepping from +24 to +14.
In terms of current infrastructure workloads, all categories moved down with ICT moving from +28 to +17, energy moving from +49 to +26, social construction downgrading from +21 to +8, transport moving from +26 to +13, water and waste stepping down to +14 from +28, and agribusiness moving further into negative territory, recording -15 when previously -9.
Key areas such as profit margins, new business enquiries, payment delays, headcount and cost of materials are all facing challenges, with cost of materials posting the highest reading since this data was first captured in Australia at +86.
12-month expectations showed some resilience with private residential staying steady at +28, infrastructure/public works creeping up from +42 to +44, and headcount looked improved with +22 from +50, however private non-residential posted +8 from +31. Profit margins stayed in positive territory, posting +4 from +20.
The important factors holding back activity showed a mixed bag with cost of materials moving from +52 to +77, shortage of materials moving from +27 to +49, insufficient demand edging up to +35 from +32 and financial constraints posting +56 from +52. However, other factors such as competition, planning/regulation, labour shortages, and weather all eased, reflecting in part as Australian governments move to remove barriers for housing development through major changes to the planning and approvals systems.
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