Australia: Construction sector coming under increasing pressure as Middle East conflict continues
Global construction activity remains steady at +8 in Q1 2026, but material costs are rising significantly due to ongoing Middle East conflict, according to RICS Global Construction Monitor.
Construction Sentiment Index moved from +7 to +8 in Q1 2026
How is the Middle East conflict affecting Australian construction material costs?
Builders, plumbers, electricians and other trades will face higher material costs, squeezing profit margins and potentially forcing price increases for clients.
Key takeaways
- Construction activity remains relatively steady with sentiment index at +8 in Q1 2026
- Material cost pressures are rising markedly across the construction sector
- Middle East conflict continues to put pressure on Australian construction industry
- RICS Global Construction Monitor tracks quarterly construction sector performance
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Australia's construction sector under pressure as Middle East conflict continues
Australia's construction sector faces mounting pressure from historic high material costs and deteriorating credit conditions, driven by the ongoing Middle East conflict affecting supply chains and economic stability.
Why it matters: Builders, plumbers, electricians, and all trade contractors will face higher material costs and reduced access to project financing, directly impacting job profitability and cash flow management.