Industry stakeholders have welcomed the release of Infrastructure Australia’s latest report, which reveals a growing demand for projects nationwide.
Australia’s infrastructure pipeline continues to be driven forward by investment in housing and energy projects; however, future investment could be scuppered by continual workforce shortages.
Infrastructure Australia has released its annual Infrastructure Market Capacity Report, which provides a detailed picture of the state of the country’s infrastructure sector.
The report was headlined by continued growth in the nation’s five-year major public infrastructure pipeline which has risen by $29 billion compared over the past year to land at $242 billion. The regulator described the lofty amount as the “highest” it had seen since the annual report was launched five years ago.
“The pipeline shows governments are doubling down on energy transmission and housing projects in a bid to meet their targets, while continuing to deliver the major transport projects we need to enable Australia’s productivity and liveability for decades to come,” Infrastructure Australia chief executive officer Adam Copp said.
The pipeline itself is a melting pot of projects, primarily utilities, as well as social housing and transport projects. The biggest growth area, according to the report, is in energy transmission and renewable projects, including wind farms and solar power. In contrast, transport projects make up more than 50 per cent of the overall pipeline.
The national infrastructure advisor created the Major Public Infrastructure Pipeline as a baseline measure for yearly infrastructure activity in the nation. It combines publicly funded infrastructure projects in New South Wales, Victoria, Queensland, and Western Australia, valued at more than $100 million, alongside projects exceeding $50 million in the Australian Capital Territory, Northern Territory, South Australia, and Tasmania.
“Our analysis shows public and private sector ambitions to deliver renewable energy projects – transmission lines, solar, wind, and pumped hydro projects – are estimated to total $163 billion over the next five years, a significant proportion of which would be driven into our regions,” Copp said.
“With community buy-in, this mammoth investment presents a once-in-a-generation opportunity for these regions–but to unlock it effectively and ensure we have the people power to do the job, we need to turn the page on three decades of stagnating productivity in construction. We need to do more with less.”
Worker conundrum
One of the major underlying concerns from the report is the projection that the sector is currently 141,000 workers short of the required number to deliver the major public infrastructure pipeline. The report forecasts this could grow to a potential 300,000-worker shortage by 2027.
In regional areas which are projected to see a rise in public investment to deliver more infrastructure projects, this issue could be exacerbated with greater workforce shortages. The report highlighted south east Tasmania, parts of Queensland including the Sunshine Coast and Toowoomba as well as areas in New South Wales including New England as spots which could see this demand increase in the coming years.
Copp said the organisation recommended a re-set in how Australia approaches delivering an infrastructure project.
“One of our key recommendations is for governments to incentivise the market to trial productivity-enhancing innovations such as Modern Methods of Construction which can then be scaled – just like the UK, US, and Singapore have done,” he said.
“We’re also recommending the development of consistent nationwide training programs to upskill workers in these innovations.
“We need to start investing in innovation rather than fixating on delivering at the lowest possible cost.”
The worker shortage is not a new concern to those within Australia’s infrastructure sector and related industries. However, industry stakeholders have said there was a degree of nuance to the shortage in the short-term but expected the issue to “intensify” in the longer term.
Australian Constructors Association chief executive officer Jon Davies said significant capacity exists in many areas to undertake infrastructure projects right now across Australia.
“Many large construction businesses are currently reducing their workforce due to delays in bringing projects to market, particularly in the energy sector, so clients who act now can access experienced teams ready to deliver at a price that will not be achievable in just one- or two-years’ time,” he said.
Davies pointed to the need for AUKUS facilities and Olympic infrastructure as well as standard infrastructure updates as some of the drivers of longer-term pain when it comes to the worker shortage.
“The looming workforce crunch is a wake-up call. Improving productivity is the answer and it will require governments industry and unions to work differently,” he said.
“We have a once-in-a-generation opportunity to align governments, industry and unions to deliver a more productive, sustainable and inclusive construction sector.”
Master Builders Australia shared similar sentiments when responding the release of the 2025 Infrastructure Market Capacity report. The association, which the building and construction industry, said the “persistent” workforce shortages had the potential to derail the infrastructure pipeline.
“The gap between labour demand and supply in critical infrastructure trades, civil construction, concreting, formwork, plant operation, engineering and project management, is now one of the most severe in the economy,” Master Builders Australia chief executive officer Denita Wawn said.
“The challenges are particularly acute in regional and remote areas, where infrastructure investment is essential to support population growth, connectivity, and improved community services.
“Industry is doing its part through investment in training, apprenticeships and upskilling, but the sheer scale of demand cannot be met without coordinated national action.”
The association called for action at federal and state government level to provide improved pathways into the construction workforce. The association has suggested faster skills recognition, streamlined migration pathways, and targeted incentives for apprentices and employers as potential options.
“If we want to deliver the homes, infrastructure and productivity gains Australians expect, we must ensure the civil construction workforce is equipped, expanded and properly supported,” Wawn said.
Sustainable construction support
The report made a specific effort to spotlight the state of play when it comes to lower emissions construction materials.
It comes on the heels of Infrastructure Australia’s Embodied Carbon Projections report which estimated that across 2022-23, the upfront embodied emissions of Australia’s buildings and infrastructure sector accounted for seven per cent of national emissions. This figure incorporates emissions from manufacturing building materials.
While the infrastructure sector is already investing in some lower emission materials, including lower carbon cement and lower carbon cementitious products, and recycled materials have shown some promise to lowering emissions, the report
Earlier this year, the Federal Government released its Transport and Infrastructure Net Zero Roadmap and Action Plan (Transport Sector plan) which highlighted the importance in shifting to lower emissions construction materials. It highlighted the potential benefits of using these materials as a means to strengthen local material supply, with procurement a key pathway to achieving this.
Several governments have introduced sustainable procurement policies including Victoria’s Recycled First Policy, Western Australia’s Transport Portfolio Sustainable Infrastructure Policy and New South Wales’ Decarbonising Infrastructure Delivery Policy while the Federation Funding Agreement Schedule (FFAS) on Land Transport Infrastructure Projects also promotes reporting on the uptake of recycled content in infrastructure projects.
Cement Concrete and Aggregates Australia chief executive officer Michael Kilgariff said procurement would be a key method to decarbonising the infrastructure pipeline.
“To deliver this pipeline, governments need smarter procurement that values quality, resilience and lower embodied carbon, not just the cheapest upfront bid,” he said.
“Consistent market pull for modern construction materials is essential if we’re to meet both delivery and decarbonisation goals.
“Our members are already supplying low-carbon concretes using fly ash, slag, silica fume, calcined clays and recycled fines; what’s missing is a clear, consistent demand signal.
“This kind of market pull is one of the most practical steps we can take to support productivity, sustainability and delivery of the pipeline.
“If we align procurement, standards and project pipelines, we can maintain the flow of essential materials while accelerating uptake of lower-emissions products, turning today’s record pipeline into long-term economic, social and environmental value.”
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