Why Construction Productivity Is Still Low in Australia — And What Needs to Change
02 December 2025
Australia is entering one of the most demanding construction cycles in recent memory. With rising housing targets, growing infrastructure commitments and intensifying pressure on delivery timelines, the industry is expected to perform at levels it has not reached before. Yet the foundation it is working from is weak. According to CEDA’s 2024 report Size Matters: Why Construction Productivity Is So Weak labour productivity in the construction sector grew only 17 percent between 1994–95 and 2022–23. By comparison, productivity across the wider market sector grew by 64 percent in the same period.
This gap sets the stage for a difficult truth. Productivity in Australian construction has not meaningfully improved in almost three decades. The challenge is structural, not temporary, and the industry cannot meet future demand without addressing the patterns that have kept efficiency low for so long.
Fragmentation is the industry’s biggest constraint
One of the most defining characteristics of the Australian construction sector is its fragmentation. A large proportion of the industry is made up of small, independent subcontractors. This creates agility, but it also makes coordinated improvement extremely difficult.
On most projects, dozens of small firms come together, each with their own routines, documentation habits and communication styles. There is no shared operating rhythm. Every project becomes a new configuration of teams, tools and processes. This limits the industry’s ability to build on what it learns. Productivity gains cannot compound when teams, systems and practices change from one job to the next.
When an industry is structured this way, the outcome is predictable. Innovation happens in pockets but rarely spreads. Good practices do not become standard practices. The system resets too often for efficiency to scale.
Risk-heavy contracts slow down decision-making
The way risk is distributed in construction projects also plays a significant role. Australian contracting models often push risk downward instead of assigning it to the parties best equipped to manage it. This creates a defensive environment.
Contractors become cautious. Subcontractors hesitate to make decisions without written confirmation. Issues surface later than they should. Communication becomes guarded rather than open. Projects slow down not because people are unwilling to work efficiently, but because the consequences of taking initiative feel too high.
For productivity to improve, the industry needs contracting approaches that reward transparency and collaboration. When teams operate with trust rather than fear of liability, productivity naturally rises.
Digital adoption is still uneven and inconsistent
Technology is often positioned as the fix for construction’s productivity challenges, but digital adoption across the Australian industry remains uneven. Large contractors have implemented structured systems, yet many small and mid-sized firms still rely on a patchwork of spreadsheets, email threads, phone calls and paper-based documents.
This inconsistency creates friction across the supply chain. Information flows differently between teams. Drawings become outdated quickly. Documentation is duplicated or lost. Project managers struggle to maintain visibility across multiple sites. Even well-intentioned workflows break down when different parts of a project operate with different tools.
Without consistent, accessible and centralised information, productivity cannot improve at scale. Coordination becomes reactive. Decisions are made with incomplete data. Avoidable delays turn into routine delays.
Rework continues to drain capacity
Rework is a longstanding issue in construction, and Australia is no exception. It emerges when instructions are unclear, documentation is inconsistent, or teams operate with different versions of information. In a fragmented, low-visibility environment, rework is almost guaranteed.
What makes rework especially damaging in Australia is the pressure on labour availability. Every hour spent redoing work is an hour the industry does not have. Rework absorbs already limited capacity, disrupts schedules and erodes margins. It is not simply a technical problem. It is a systemic signal that communication and coordination are still not functioning as they should.
The workforce gap is widening
What makes rework especially damaging in Australia is the pressure on labour availability. Every hour spent redoing work is an hour the industry does not have. Rework absorbs already limited capacity, disrupts schedules and erodes margins. It is not simply a technical problem. It is a systemic signal that communication and coordination are still not functioning as they should.
These workforce dynamics make productivity harder to achieve because the industry is trying to meet rising demand with uneven capability and tightening labour supply. Without stronger and more consistent systems, the workforce cannot operate at its full potential.
What needs to change for productivity to improve
The data from CEDA sets the context, but the real challenge is cultural and operational. Improving construction productivity in Australia requires a shift toward more aligned, predictable and transparent ways of working. The fundamentals that matter include:
- clearer communication
- consistent documentation
- real-time visibility across trades
- earlier issue escalation
- standardised workflows where possible
- more collaborative contract structures
These are not quick fixes, but they are achievable at the firm and project level. They do not require waiting for large-scale policy reform. They require discipline, clarity and a willingness to modernise how teams coordinate.
Where Aedrix fits into this landscape
Aedrix does not claim to resolve the deep structural issues behind Australia’s construction productivity challenges. But it does help address the operational barriers that slow teams down every day. When documents, communication, tasks and site updates live in a single environment, teams work with more clarity and fewer interruptions. Information becomes consistent. Coordination becomes simpler. Rework becomes less likely.
In a fragmented industry, even small gains in alignment have an outsized impact. Tools like Aedrix support that shift, helping firms strengthen the foundations that productivity ultimately depends on.
Australia cannot achieve its housing and infrastructure ambitions with productivity that has grown only 17 percent in nearly 30 years. The industry needs more than effort. It needs alignment. It needs consistency. It needs visibility and trust. And it needs systems that allow teams to focus on the work itself rather than the friction around it.
Productivity will improve when the underlying structure of how construction operates begins to change. The sooner that shift starts, the better positioned the industry will be to meet the demands ahead.
