New economic growth data is a taste of what’s to come if we get housing and construction wrong

3 June 2026

Today’s ABS National Accounts data reveals that GDP growth in Australia slowed to 0.3 per cent in the first quarter of 2026.

“Interest rates have been on the way up since the start of the year, with economic activity hit by events in the Middle East. This makes it much more challenging for the building and construction industry,” said Master Builders Australia Chief Economist Shane Garrett.

“The Federal Budget will not help this picture, with independent modelling finding that it will shave $864 million off GDP over the next four years.

“If we want to turbo charge our economy, we have to get construction right. It makes up 11 per cent of GDP and multiplies spending by 2.5 times across the broader economy.  $89.3 billion worth of construction activity was carried out during the first quarter of 2026, and we need a whole lot more to meet Australia’s needs,” said Mr Garrett.

Master Builders Australia CEO Denita Wawn says that small builders, which make up 98 per cent of the industry, are being hit hard by interest rates, global instability, and tax hikes in the Budget.

“This first quarter data includes only one month of the Middle East conflict with the fuel price spikes and supply chain disruptions. It’s a taste of what’s to come when the economic shock is further compounded including by the Federal Government’s decision to hike the taxes on housing.

“Recent developments, including policy debates about preferential treatment for tech startups over builders and tradies further demonstrates just how disconnected some of this policy making is from the reality of how tough it is to run a small business in Australia today.

“As we saw in yesterday’s build approval’s data, new home building was already on the back foot in the lead up to the May Federal Budget, with approvals falling in both March and April. More needs to be done to not only uplift the economy but also to deliver our roads, hospitals and homes,” said Ms Wawn.

Media contact: Dylan Hafey, Media Advisor

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