The escalation of conflict in the Middle East is flowing into Australian construction markets primarily through cost, procurement and programme volatility. This brief sets out where risks are emerging, why they matter, and how projects can respond proportionately.

Australia is not short of construction projects. It’s short of capacity. Approvals are up, pipelines are growing and policy levers are being pulled. Yet every project must fight hard for labour, subcontractors, materials, finance and certainty.

Australia’s construction market is entering a new phase marked by cost discipline, delivery scrutiny and deeper due diligence. Our latest cost escalation forecasts show the market returning – slowly in some regions, more sharply in others – to historical norms.

Australia’s building and construction industry continues to balance geopolitical and economic uncertainty with strong fundamentals and growth potential. This update examines the key factors shaping the sector in 2025 and their cost impacts. Amid the present volatility, visionary leaders are steering towards a positive future.

Australia’s construction sector shows resilience, with growth opportunities on the horizon despite global uncertainties. Industry players must remain vigilant, navigating complex cost pressures and evolving market demands to secure long-term stability.

While construction sector activity has slowed, there are opportunities ahead as adaptable and innovative businesses pivot to take advantage of investment in defence, energy and future industries, Slattery’s July 2024 Market Update reveals.