Australia’s construction industry enters 2026 in recalibration rather than crisis. After years of volatility driven by rising costs, labour shortages and elevated insolvencies, the sector is operating with greater discipline as capacity and feasibility take precedence over scale and speed.
Financial strain remains widespread, while demand for housing, infrastructure and social assets continues to exceed supply. Even so, sentiment is holding. Firms are anticipating a gradual lift in project flow through 2026 as funding, policy and planning cycles begin to align.
According to Hubexo’s Construction Outlook for 2026, the national construction pipeline is showing early signs of momentum. Drawing on LeadManager and Analytix insights, the report tracks projects entering, blocking and exiting the pipeline across regions and sectors, revealing how risk, policy and confidence are shaping Australia’s construction trajectory.
What the Construction Outlook analyses
- Projects entering, stalling and exiting the pipeline
- Where delays and bottlenecks are forming
- State-by-state performance across NSW/ACT, Victoria, Queensland and Western Australia
- Sector-level trends spanning:
- Commercial & Hospitality
- Residential
- Community & Public Buildings
- Industrial, Infrastructure & Transport
The data shows a clear shift. The total value of project proposals across Australia rose by more than 60% in the September quarter of 2025, driven primarily by energy and resources projects alongside renewed residential activity.
At the same time, pressure points in the pipeline are easing. Deferral and abandonment rates have continued to decline, signalling improving market stability. The nationwide deferral rate now sits at 1.6%, while abandonment rates across NSW/ACT, Victoria, Queensland and Western Australia also average 1.6%.
Looking ahead, construction commencements are forecast to increase significantly between Q4 2025 and Q3 2026. In volume terms, the number of projects is expected to surpass previous levels, pointing to a gradual rebuilding of momentum rather than a sharp rebound.
“From where we sit—tracking projects as they enter, stall and break ground—the shifts in the pipeline are unmistakable. Early-stage values are up more than 60% on the previous quarter. Deferral and abandonment rates have softened. Now that prices, rates and supply chains have steadied, momentum is building across 2026”, Hubexo, President, APAC, Ashleigh Porter, said.
“What’s coming is a 2026 delivery wave as projects finally break ground—but the limited labour pool is struggling to keep pace. That tension defines this cycle. Firms aren’t debating technology anymore; they’re demanding tools that cut risk and fragmentation. Opportunities are out there, but they won’t be won with yesterday’s systems.”
Industry sentiment: cautious recovery, persistent constraints
Insights from Hubexo’s 2025 Sentiment Survey, alongside in-depth discussions with developers, architects, builders and industry specialists, reinforce a picture of cautious recovery rather than broad-based relief.
The report examines:
- Project delays, margin pressure and cashflow risk
- Workforce constraints and delivery capacity
- Capital access and feasibility scrutiny
- Sustainability expectations and embodied carbon requirements
- The impact of government policy, both supportive and restrictive
Developers are increasingly focused on capital access and feasibility management, reflecting heightened scrutiny from financiers and partners.
“The market is consolidating towards developers who can deliver large, complex projects with in-house capabilities, diversified risk management and clear governance frameworks”, Coronation, Managing Director, Joe Nahas, told Hubexo.
Architects report a market that remains active but defined by tighter cost control and greater commercial accountability.
“The market remains active, though tempered by financial and resourcing pressures. These realities underscore the demand for architects who can deliver design that is not only aspirational, but also commercially astute and technically rigorous”, Plus Studio, Director, Michael McShanag, said.
Builders and subcontractors, meanwhile, report growing confidence heading into 2026, with digital tools playing a larger role in decision-making, quality and safety outcomes.
“As we look ahead through 2025 and beyond, our focus remains on remaining agile, strategic project selection… building on our deep and trusted relationships with our delivery partners”, BESIX Watpac, Chief Executive Officer, Mark Baker, said.
Across the industry, collaboration remains essential. Risk continues to shape decisions at every stage of the project lifecycle, influencing how work is scoped, sequenced and delivered.
The lesson of the previous cycle is clear. Improvement will not come through acceleration alone, but through discipline, coordination and better intelligence guiding execution.