I am delighted to share Infrastructure Australia’s 2025 Infrastructure Market Capacity Report – our annual research program providing government and industry with a clear picture of the nation’s demand to build against the market’s capacity to deliver on that demand in terms of workers and materials.
This year’s report reveals a remarkable turnaround in national infrastructure investment. It shows the Australian, state and territory governments have injected almost $30 billion into the national infrastructure pipeline over the past year, taking the five-year Major Public Infrastructure Pipeline to an unprecedented $242 billion.
That’s the highest level since IA began tracking market capacity five years ago – a research program we commenced back in 2020, at the request of the Prime Minister, Premiers and Chief Ministers, as National Cabinet recognised the need to track supply and demand in what was an increasingly hot infrastructure market.
Five years later, our research program now tracks demand to build across almost 100 per cent of the market, capturing more than $1 trillion of government and private investment.
We’ve also developed tools like our Pipeline Simulator and Map to help governments visualise where and when projects are scheduled, enabling better planning and pipeline sequencing, avoiding bottlenecks and ultimately delivering better value for taxpayers.
As the Australian Government’s independent advisor for nationally-significant infrastructure, IA’s focus is on the Major Public Infrastructure Pipeline (MPIP), which accounts for about a quarter of total infrastructure expenditure and covers publicly-funded infrastructure projects valued over $100 million in NSW, Victoria, Queensland and Western Australia, and over $50 million in South Australia, the ACT, the NT and Tasmania.
Taking a closer look at the MPIP, we’re seeing that significant uptick in investment being driven primarily by energy transmission and housing projects, as governments double down in a bid to meet housing and net zero targets.
Investment in utilities, particularly energy transmission projects, is at the forefront, expected to more than double to $36 billion over the next five years.
Building projects, which includes social housing, are projected to rise by $6 billion to $77 billion, while transport projects continue to account for more than half of the total pipeline at $129 billion.
These are, of course, the projects we need to enable Australia’s productivity and liveability for decades to come, but the added demand brings challenges for the market.
Productivity growth in construction remains sluggish and our analysis projects the industry is currently short of 141,000 workers needed to deliver the MPIP.
And it’s our regions that stand to be hit the hardest.
Our research projects ten regions across NSW, Tasmania and Queensland where public investment could rise by at least 200 per cent – even higher for some regions.
Our analysis shows public and private sector ambitions to deliver renewable energy projects—transmission lines, solar, wind, and pumped hydro projects—are estimated to total $163 billion over the next five years, a significant proportion of which would be driven into our regions.
If we can get the community buy-in and the social licence right, this huge amount of investment is a once-in-a-generation opportunity for these regions.
But to actually unlock that effectively, we need to make sure we have the people to do the job, and we need to turn the page on what’s now been three decades of stagnating productivity in construction.
We need to do more with less.
These challenges aren’t unique to Australia, and there is inspiration to be taken from how other countries are tackling them.
One of our key recommendations is for governments to incentivise the market to trial productivity-enhancing innovations such as Modern Methods of Construction which can then be scaled—just like the UK, US, and Singapore have done.
We’re also recommending the development of consistent nationwide training programs to upskill workers in these innovations.
We need to start investing in innovation rather than fixating on delivering at the lowest possible cost. We can’t keep doing the same thing and expecting a different result.
Finally, I’d like to extend my sincere gratitude to our stakeholders across government and industry for their ongoing support and collaboration – the strength of this research lies in these relationships, and through the unique datasets and insights shared with us as a result.
I encourage you to share the report with your networks and explore the accompanying interactive dashboard, which provides detailed insights into demand and supply by infrastructure occupation. You can view both of them here.
If you have any questions or would like to discuss the report’s findings further, please do not hesitate to reach out to our team at engagement@infrastructureaustralia.gov.au.
Thank you for your continued engagement as we work together to build a stronger, more resilient infrastructure sector for Australia.
Adam Copp
Chief Executive, Infrastructure Australia