Latest construction productivity decline is a call to action

06 February 2026

Master Builders Australia (MBA) is calling on the Federal Government to fast-track a radical productivity uplift agenda. Today’s new ABS multifactor productivity data shows the building and construction industry has suffered a seventh consecutive year of decline, with productivity now being 21.5 per cent lower than it was just over a decade ago.

MBA CEO Denita Wawn explained that of the Australian economy’s 16 sectors, none has seen so much productivity wiped out over the past ten years than building and construction.

“Construction businesses are using more labour and materials than ever before but producing fewer new homes and other outputs. This is not the fault of individual businesses but rather due to the suffocating effects of regulation, red tape and bureaucracy.

“Problematic clauses in enterprise agreements with the CFMEU have also had an adverse impact on productivity

“Provisions that limit flexibility with respect to the taking of Rostered Days Off and clauses that essentially give unions veto power over the selection of subcontractors must be reworked and rebalanced to ensure that appropriate workplace conditions can support improvements to productivity onsite.

“Declining productivity slows down the delivery of new homes and makes those that do get built much more expensive. Our industry’s poor productivity performance hits the pockets of people right across the country because housing costs take up such a large share of household incomes,” said Ms Wawn.

Ms Wawn said the upcoming federal budget provides an opportunity to start to lift construction productivity with initiatives including:

• Incentives for businesses to innovate and invest in productivity-enhancing investment across the supply chain (in design, digital, IT systems, manufacturing and assembly).
• Funding to modernise the National Construction Code and Australin Building Codes Board to ensure they are fit for purpose and enhance productivity.

“It is time for the Federal Government to act, and Master Builders also continues to call for a red tape reduction by at least 25 per cent, and to avoid policies that increase the cost of vital products,” concluded Ms Wawn.

Background

Multifactor productivity measures how effective an industry is at converting resources like labour and materials into final outputs: new homes, infrastructure, schools and hospitals.

Media contact: Dylan Hafey, Media Advisor

0497 330 064 | dylan.hafey@masterbuilders.com.au