Infrastructure Market Capacity 2022 – Risks to project delivery increase as 5-year investment climbs by $15b

Publication Date
14 December 2022

Improving risk management and proactively sequencing the major infrastructure pipeline will be key to managing the impacts of an overheated construction market, escalating input costs, labour shortages and productivity challenges, Infrastructure Australia’s 2022 Infrastructure Market Capacity report has found.   

Infrastructure Australia’s Infrastructure Market Capacity Program is unique in the world as it provides a national view of Australia’s infrastructure pipeline and the market’s ability to deliver on it.  

The 2022 edition shows that risks to on-time and on-budget project delivery have increased in the last 12 months, with demand for major public infrastructure projects climbing by $15 billion in a year.   

Amid an increase in public and private sector infrastructure investment, Infrastructure Australia’s Acting Chief Executive Adam Copp said the industry was also contending with a surge in supply-side risks in 2021-22 caused by continuing uncertainty in the global economy.  

“Australia’s infrastructure sector is facing significant disruption to supply chains caused by the COVID-19 pandemic, volatile demand and more recently, the war in Ukraine. This is causing delays and cost escalations for imported items, while delivery risks are being compounded by severe labour shortages that industry report as having the greatest impact on capacity.  

“Industry also reports that fast-rising costs and contracts that are increasingly allocating risk responsibilities to parties not best-placed to manage them, combined with sharp declines in tier 1 contractor’s profitability observed in our 2021 edition, has contributed to a sharp rise in construction sector insolvencies in 2022. This leaves fewer companies to deliver the pipeline of work, with many already operating at 90% capacity and above.

Key findings

  • The five-year pipeline of major public infrastructure projects is valued at $237 billion - an increase of $15 billion in the last 12 months and equivalent to 6.7% growth.
  • Transport accounts for 63% of spend. Investment is concentrated in New South Wales, Victoria and Queensland (84% of spend).
  • The demand for materials for use in road construction projects is expected to grow to a peak of $7.6 billion in 2023−24.
  • Industry reports delays of up to 45 weeks in delivery of large diameter concrete pipe.
  • Labour scarcity is the single biggest issue faced by construction companies.
  • The cost of construction materials has risen by an average 24% in the last 12 months.
  • As of October 2022, public infrastructure projects, including small capital projects, face a shortage of 214,000 skilled workers.
  • In 2023, labour demand is projected to increase 42,000 to a peak of 442,000. This is more than double the projected available supply.

The opportunity to address supply-side challenges with recycled materials

This year, Infrastructure Australia expanded the Market Capacity Program to investigate the potential to unlock new supply chains of recycled materials for infrastructure construction.

It found that based on current technology and standards, around 27% of conventional materials used for road projects could be replaced with a range of recycled materials. This would mean substituting approximately 54 million tonnes of conventional materials used in roads infrastructure with approximately 52 million tonnes of recycled materials.

With advancements in technology and updates to standards, the tonnage of conventional materials replaced could rise to 43%, replacing 87 million tonnes of conventional materials with 80 million tonnes of recycled products

“Increasing the use of recycled materials is a cost-effective way to reduce waste and emissions and to deliver safe, sustainable and reliable infrastructure. However, in terms of embracing this opportunity, industry uptake is highly dependent on the technology, standards, market appetite and processes across the supply chain,” Mr Copp said.

“The increased adoption of recycled materials in infrastructure projects can be expected to create additional jobs. Adopting greater quantities of recycled materials would create 9.2 jobs for every 10,000 tonnes of recycled waste, compared with only 2.8 for sending waste to landfill.

“With demand for materials for use in road construction projects expected to grow to a peak of $7.6 billion in 2023−24, there are substantial economic, social and sustainability benefits in utilising more recycled materials in delivering the infrastructure pipeline,” Mr Copp said.


A number of recommendations and actions from previous Infrastructure Australia publications including the 2021 Australian Infrastructure Plan and Delivering Outcomes are reaffirmed in this report. Updated recommendations in this report include:

  • Improve industry capacity and capability by prioritising procurement and portfolio management, and increasing pipeline transparency, certainty and confidence.
  • Improve value for money and reduce risk by consistently adopting appropriate best-practice front-end due diligence for projects.
  • Build support and embed practices for the circular economy by developing a circular economy roadmap for the infrastructure sector, including annual progress reports.
  • Ensure the industry is a sector of choice for employees and can meet current and future workforce demands by introducing cultural reform that embraces diversity and inclusion.
  • Implement the focus areas of reform outlined in: Delivering Outcomes: A roadmap to improve infrastructure industry productivity and innovation.

About the Infrastructure Market Capacity Program

The 2022 Infrastructure Market Capacity report is the second report in this series published by Infrastructure Australia in response to a request made by the Prime Minister and First Ministers at the Council of Australian Government in March 2020. In meeting this request, Infrastructure Australia has worked collaboratively with state and territory governments, and industry across Australia and internationally.

The Market Capacity Program is underpinned by a data-driven capability designed to comprehensively understand the capacity of the market to deliver the pipeline of major public infrastructure projects. A National Infrastructure Project Database aggregates and organises project data and a Market Capacity Intelligence System applies a comprehensive suite of analytical and system-based tools to interrogate and visualise capacity across sectors, by project type and resource inputs.