FX.co ★ Australia Q2 Construction Output Unexpectedly Falls

Total construction work in Australia fell by 2.1% quarter-on-quarter to AUD 82,515.9 million in Q2 2026, reversing an upwardly revised 4.3% increase in the previous quarter and confounding market expectations of a 0.5% rise. This was the first contraction since Q3 2025 and was driven mainly by a steep drop in engineering work, which declined 6.0% to AUD 36,672.2 million after surging 7.4% in Q1.

By contrast, building construction continued to grow, though at a slightly slower pace, easing to 1.3% from 1.7% and reaching AUD 45,843.7 million. Within this segment, non-residential building growth decelerated sharply, edging up just 0.5% after a 3.4% gain in the prior quarter, while residential construction strengthened, with growth accelerating to 1.7% from 0.6%.

Regionally, construction activity contracted most sharply in Western Australia (-19.7%), followed by Tasmania (-9.5%) and the Australian Capital Territory (-8.8%). In contrast, output increased in Victoria (5.8%), the Northern Territory (2.7%), South Australia (1.6%), New South Wales (1.4%), and Queensland (1.1%).