An outlook on confidence, constraints and capability in Australia’s construction industry
This year, BDO’s report captures a practical outlook on how construction leaders can protect performance now and build the capability to stay competitive.
Geopolitical tensions, technological advancements, inflationary pressures, rising costs, and increasing compliance are shaping how construction businesses operate. At the same time, sustained demand, growing defence activity and a strong pipeline of work are creating opportunities for organisations that can adapt and build capability for the future.
BDO’s 2026 Construction Report captures a practical outlook on how construction leaders can protect performance now and build the capability to stay competitive to position their business for long-term success.
The survey insights provide a pulse check of Australia’s construction industry and the sentiment of construction leaders across the commercial, government, industrial and residential subsectors on key themes such as productivity, artificial intelligence (AI), and environmental, social and governance (ESG) measures.
“While the market has somewhat stabilised, it is uncertain how sustainable this will be as intense competition, geopolitical risks, tighter contractor risk appetites, inflationary pressures and rising costs are all continuing to squeeze margins,” BDO Partner, Audit & Assurance, Elysia Rothwell said.
Australia’s construction sector is entering a period of relative stabilisation, supported by sustained infrastructure demand and a strong pipeline of work. Confidence in the sector is improving, indicated by the findings from the survey, but there is further potential for this to be translated into improved performance across all parts of the operating model.
Drawing on insights from large construction organisations across Australia, the survey explores growth and financial performance outlooks, as well as the capabilities leaders are prioritising to navigate ongoing volatility and the opportunities emerging through technology advancements and evolving delivery models. Organisations are placing greater emphasis on operational resilience, workforce capability and more disciplined project selection as they seek to translate demand into sustainable growth.
These trends are echoed in South Australia’s market with major defence and defence-related projects currently shaping construction activity, creating strong demand in a relatively small and competitive market. Investment is flowing into the sector and providing opportunity for contractors. Meeting this demand reinforces the importance of workforce planning, capability development and project delivery.
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The survey also points to a shift in leadership focus. AI adoption is now widespread across the sector, and while organisations are still in early stages of maturity, confidence in its potential to drive measurable productivity gains remains high. In most cases, AI usage is unstructured and experimental, and moving beyond isolated use cases towards more deliberate capability and governance frameworks is critical in achieving material productivity outcomes.
ESG considerations are now firmly embedded across construction organisations, largely driven by expanding sustainability reporting obligations and stakeholder expectations. For many, ESG remains compliance‑led, presenting an opportunity for leaders to better integrate sustainability into commercial decision‑making, risk management and long‑term value creation.
Together, the insights from BDO’s survey highlight the decisions that matter most for construction leaders today: how to translate demand into sustainable performance, lift productivity through structural change, and strengthen organisational capability to build resilience and competitiveness for the future.
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