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    Australian construction costs to stay high: escalation and risk notes for project teams

    June 18, 2026|

    Reviewed by Tom Sullivan

    Australian construction costs to stay high: escalation and risk notes for project teams

    First reported on Roads & Infrastructure (AU)

    30 Second Briefing

    Australian construction costs are projected to stay high for at least three years, with WT’s latest Australian Construction Market Conditions Report forecasting 2026 BAU escalation of 5.5 per cent for building and 5.1 per cent for infrastructure. The twice-yearly report links sustained cost pressure to geopolitical uncertainty and supply chain volatility, affecting major road, rail and civil works procurement. Contractors and clients will need to factor higher escalation allowances into long-duration contracts, risk contingencies and value engineering for large transport and public infrastructure programmes.

    Technical Brief

    • Cost projections are expressed as “business-as-usual” (BAU) escalation, excluding abnormal project-specific risk uplifts.

    Our Take

    Roads & Infrastructure Magazine’s earlier ‘Roads Review: Looking Forward’ piece in our database emphasised people and culture over mega-projects; sustained 5 per cent-plus escalation in Australia suggests labour retention and productivity initiatives may now be as critical to cost control as materials procurement.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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