Domestic price of concrete, cement and sand

IBISWorld anticipates the domestic price of concrete, cement and sand to dip by 1.0% in 2024-25 to 133.9 index points. Recent ABS data reveals that total residential dwelling approvals declined by 0.9% in December 2024, with approvals for detached houses falling by 2.8% to 8,860. Several key factors drive this downturn. According to CoreLogic research, construction costs have surged by over 30.0% in the past four to five years, significantly eroding developer profit margins and rendering many projects financially unviable. Also, labour shortages in the construction sector exacerbate delays as the supply of skilled workers fails to meet demand. Competition from non-residential projects further diverts resources from residential developments. These factors are anticipated to weigh domestic prices for key construction materials like concrete, cement and sand in 2024-25. To address these issues, the Housing Industry Association recommended that the government take steps to eliminate obstacles hindering the increase of housing supply, reduce expenses related to making land ready for development and tackle the burdens posed by taxes and labour supply shortages.

Offsetting this decline is significant government investment in infrastructure. Both state and federal levels are actively funding shovel-ready projects, including the ongoing Bruce Highway Upgrade in Queensland and various renewable energy initiatives. Western Australia is also poised to become a leading state for engineering construction because of a rebounding mining sector, with major projects shifting from metropolitan to regional areas. Increased infrastructure spending by state and federal governments, attempting to drive economic growth, is expected to rise heavy and civil engineering construction sector activity over the five years through 2024-25. Heightened investment in infrastructure has drived up the prices of concrete, cement and sand over the period. Overall, IBISWorld expects the domestic price of concrete, cement and sand to push up at a compound annual rate of 4.3% over the five years through 2024-25.