Queensland’s construction productivity slide stalls building projects as Olympic deadline looms

Productivity in Queensland’s construction sector is only 5 per cent higher than in 1994-95, compared with a 65 per cent increase recorded across the rest of the country, alarming new figures show.

Only 34,000 new dwellings were built each year on average through the 2020s in Queensland, compared with the 50,000 built a year in the mid-1990s. Picture: Evan Morgan

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Infrastructure projects across Queensland need to be reprioritised or the government could miss key deadlines for Olympic Games venues, builders warn as labour productivity data reveal a seven-year slip in onsite efficiencies.

The Queensland Productivity Commission’s interim report into the building sector has found that the state’s labour productivity is only 5 per cent higher than it was in 1994-95, compared to a 65 per cent jump recorded across the rest of the country.

Queensland’s weak performance reflects a 9 per cent drop since 2018, which means 9 per cent more tradies are needed today in order to deliver the same output of seven years ago. As a result, 77,000 fewer homes have been built in that time.

Strong population growth throughout the pandemic and a record capital works spend by the Queensland government is straining the construction industry, which has been unable to keep up with demand amid surging costs and labour constraints.

“If Queensland is to meet the needs of its growing population, match infrastructure commitments and deliver the 2032 Olympic and Paralympic Games, productivity across the industry will need to improve,” the report states.

Master Builders Queensland chief executive Paul Bidwell said the government needed to get the sequence of projects right so that the industry could be adequately prepared to cater for the growing pipeline of work, which had more than doubled since December 2020.

“We acknowledge there are issues in prioritising and I wouldn't want to be in that position, saying this school is more important than that hospital and neither are as important as the Olympics,” Mr Bidwell said.

The Crisafulli Liberal National Party government has repeatedly issued assurances that the state has the capacity to build and upgrade more than a dozen venues across the state for the 2032 Games within the allotted $7.1bn funding envelope, including a new 63,000-seat stadium in inner-city Brisbane.

The report also found that if the Crisafulli government had not ordered a freeze on the Best Practice Industry Conditions for workers on government projects over $100m, Queenslanders would have paid an extra $20.6bn for project delivery by 2029-30.

The policy, dubbed the CFMEU tax by the government, would have caused general build costs to rise 25 per cent, led to the construction of 26,500 fewer homes and pushed rents 8.3 per cent higher over the period.

“Data suggests there have been no material improvements to safety outcomes across the Queensland construction industry since their introduction,” the report states.

“While the Queensland government has announced a pause on BPICs, there appears to be a strong case for permanently removing the policy.”

Labour productivity in Queensland’s building sector has increased by only 5 per cent since 1994-95. Picture: supplied

Property Council Queensland executive director Jess Caire said the report finding in conjunction with the Commission of Inquiry into the CFMEU would hopefully act as a catalyst for real change in the industry.

“Queensland’s construction sector is at a crossroads,” Ms Caire said.

“I hope industry will be able to reflect on 2025 as the year where flagging productivity in the construction sector was successfully addressed and systematic change undertaken to ensure we give ourselves a chance at putting a roof over the head of every Queenslander.”

The falling supply of new homes being delivered across the state is exacerbating affordability pressures, with Brisbane now the second-most expensive capital city housing market in the nation.

Only 34,000 new dwellings were built each year on average through the 2020s, compared to the 50,000 built per annum into the mid-1990s.

This is despite the building sector now employing two-thirds more workers than it did 30 years ago.

Preliminary recommendations to bolster productivity included a reworking on restrictive land-use policies and a re-evaluation of capital works to ensure the projects commissioned by the government are appropriate and reflect market conditions.

Further industry consultation will take place until August 28. The QPC is set to provide its final report to the government in October before it is published in January.

The Crisafulli government re-established the Productivity Commission in March, with its first task to interrogate the construction industry