New national accounts released this week show that GDP growth slowed to just 0.2 per cent in the March 2025 quarter, marking the weakest performance in nearly a year.
Yet, in the face of this broader slowdown, the building and construction industry stood tall, expanding by 2.2 per cent and effectively preventing the country from sliding into recession.
According to Master Builders Australia Chief Economist Shane Garrett, residential construction was the standout performer, delivering a 2.6 per cent lift driven by robust demand for home renovations.
Non-residential building followed closely behind with a 2.1 per cent gain, while engineering construction added 1.5 per cent.
Mr Garrett noted that this uptick in construction activity coincided with the Reserve Bank of Australia’s first interest rate cut of the year, which helped give the sector, and the broader economy, a much-needed shot of confidence.
But the outlook is far from guaranteed. Garrett cautioned that while these figures are encouraging, the sector still faces significant hurdles, particularly as the National Housing Accord ticks over into its second year.
“We are still building homes at a far slower rate than what’s needed to hit the Accord target,” he said. “We can only do this by rapidly addressing our industry’s severe productivity problems and allowing our industry workforce to expand.”
That call to action was echoed by Master Builders Australia CEO Denita Wawn, who stressed the need for immediate policy reform from the new Federal Government.
“Builders are doing the heavy lifting for the economy. Now it’s time for the policy settings to do the same.”
Her message was clear: cut the red tape, bolster skills pipelines, and fix broken planning systems so the construction sector can keep building the homes and infrastructure Australia desperately needs.
