Building and construction keeps Australia out of recession for now

Australia’s economy is slowing, but it’s the country’s builders who are keeping it upright for now, says peak building and construction industry association Master Builders Australia.

New national account figures released today show Gross Domestic Product (GDP) growth slowed to just 0.2 per cent in the March 2025 quarter, the weakest result in almost a year.

However, building and construction activity expanded by 2.2 per cent, making it a standout performer.

Without the contribution from the industry, Australia’s economy would have slipped backward into negative territory.

Master Builders Australia Chief Economist Shane Garrett said within the construction industry, residential building racked up the strongest gain (+2.6 per cent) during the quarter.

“Demand for home renovations was particularly strong.

“Non-residential building delivered a 2.1 per cent uplift during the quarter, while engineering construction gained 1.5 per cent.

“The improved performance of construction activity coincided in the same quarter as the Reserve Bank of Australia’s initial interest rate cut, giving confidence a much-needed boost.

“But momentum won’t last without targeted reform to lift productivity.

“Even though building and construction is moving in the right direction, it still faces an enormous challenge with next month marking the end of the National Housing Accord’s first year.

“We are still building homes at a far slower rate than what’s needed to hit the Accord target.

“We can only do this by rapidly addressing our industry’s severe productivity problems and allowing our industry workforce to expand.”

Master Builders Australia CEO Denita Wawn added the new Federal Government needs to help the industry do what it does best: build.

“That means cutting red tape, boosting skills pipelines, and fixing broken planning systems.

“Builders are doing the heavy lifting for the economy, now it’s time for the policy settings to do the same.”

Media contact: Dee Zegarac, National Director, Media & Public Affairs
0400 493 071 | dee.zegarac@masterbuilders.com.au