Market insights – around the globe

Our team of economists have worked closely with our local experts to analyse an expansive cost dataset to provide insight into how the construction industry is performing. Use the filter below to access the full data breakdown for the individual market of your choice.

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Australia - Melbourne


Economic outlook

Construction enters a growth phase

Australia’s economy in 2018 looks positive, with forecast growth close to 3 percent. Sydney and Melbourne are seeing strong growth in financial services, and real estate, with 17 percent jobs growth over the year. Unemployment has fallen to 5.4 percent.

In 2017 short-term visitor arrivals surged to 9 million, boosting the tourism and higher education industries. Meanwhile, there were proposals for new mining projects in Western Australia, Queensland and South Australia, as minerals prices recover. The renewable energy sector is also buoyant.


Market and trends

Several large commercial office projects in Sydney and Melbourne are underway. And while apartment construction has eased, the large number of approvals late in 2017 indicates plenty to come. Road and rail projects are ramping up, boosting the local economies and demand for trade skills. Tunnelling is big. Sydney Metro Rail is delivering 15km of tunnels and Westconnex, a 33km motorway, is mostly underground. In Melbourne there is the West Gate Tunnel project and Monash freeway upgrade. In Queensland the re-elected labour government committed to deliver Cross River Rail.



Key Facts
Tendering: Hot
Market: Warmer
Cost escalation 2017–18: 2.0%
Cost escalation 2018–19: 4.0%
Contractor’s margin: 4.0%
Preliminaries: 12.0%
Location factor (USD): 104.7
PPP coefficient: 2.0



Future outlook

Construction is entering another growth phase, set to last until the end of the decade. Higher numbers of overseas tourists are boosting hotel construction. Commercial, health, defence, retail and hotel construction will increase in parallel to the massive multi-year road and rail projects underway, as well as several natural resources projects in planning. Construction costs are likely to overheat as competition for labour hots up.


This content is part of the International construction market survey 2018

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