The Australian Constructors Association (ACA), in partnership with Arcadis, has released the 2025 Construction Market Sentiment Survey, revealing that improved collaboration is the most powerful lever for boosting productivity across Australia’s construction sector.
ACA Chief Executive Officer Jon Davies said the message from industry is clear.
“Almost 9 in 10 respondents said collaboration is the number one driver of productivity,” said Davies.
Davies said clients continue to rely on outdated contracting approaches that shift excessive risk onto builders, rather than fostering cooperative project delivery.
He warned that these traditional Lump Sum, hard dollar contracts have repeatedly shown they fail to drive success, instead leading to costly disputes, schedule blowouts, and diminished project outcomes.
The survey highlights that the industry’s challenges are being compounded by ongoing labour and skills shortages.
“With capacity tightening, the only way to do more with less is by working smarter together. Collaboration is no longer optional – it’s the only way to keep projects on track,” said Davies.
The report also indicates a significant shift in market activity.
Davies noted that Queensland is currently outpacing other states, while New South Wales and Victoria have entered a steadier phase marked by reduced transport investment.
However, he cautioned that tendering activity in Queensland during the first half of 2025 has been notably quiet, stressing that bringing projects forward will be essential to sustaining the state’s momentum.
Arcadis National Service Lead, Matthew Mackey, said new areas of demand are reshaping the construction landscape.
“Transport infrastructure is tapering off in NSW and Victoria, while growth is emerging in water, sewerage, energy, data centres, and social and affordable housing,” said Mackey.
“But this new demand isn’t yet strong enough to offset the decline in transport, creating challenging conditions overall.”
On costs, the survey found that while most material prices are beginning to stabilise, categories such as concrete and plasterboard remain under pressure.
“The findings can’t be ignored,” said Davies.
“We have opportunities to grow, but without genuine collaboration, a steady pipeline and smarter risk-sharing, Australia’s construction industry risks falling short of delivering the infrastructure the nation needs.”
The 2025 survey also identified key industry trends and statistics :
- The hottest sectors are Energy and Sewerage (87%), Data Centres (80%), and Social and Affordable Housing (80%).
- The Retirement Living sector is also gaining momentum (78%), alongside strong Data Centre activity.
- More than half (55%) of respondents believe the Build-to-Sell private sector market has stalled — a concerning sign amid Australia’s housing crisis.
- Pricing pressures are easing across most materials, while industrial relations remain a top barrier to productivity, cited by 85 per cent of respondents.
The full 2025 Construction Market Sentiment Survey report can be accessed through the Australian Constructors Association’s website.
