Addressing the drivers of poor productivity is vital to meeting Queensland’s infrastructure needs, says CCF QLD CEO Damian Long
Productivity in the building and construction industry has recently been in focus on the back of rapidly increasing construction costs, labour reforms and budget blowouts resulting in declining volume of infrastructure being delivered for the same dollar figure.
Many reviews of the industry’s productivity show a decline against other industries. However, the building and construction industry is viewed under the same umbrella without recognising that some segments of the industry are more productive than others. The Productivity Commission’s 2025 report, Housing Productivity: Can We Fix It?, has split the heavy and civil engineering sector from the building and construction industry conglomerate.
Since 1994–95, labour productivity in the heavy and civil engineering sector has increased by 44 per cent – nearly matching the economy-wide average of 49 per cent. In contrast, building construction productivity sits at -13 per cent over the same period, dragging the average productivity of the ‘construction industry’ as a whole down to 13 per cent.
While these figures show our sector is not doing as poorly as other parts of the industry, we cannot rest on our laurels. The drivers of poor productivity are not exclusive to building construction and, unless addressed, could drag our sector down, but addressing them could significantly improve productivity in our sector.
Queensland’s building and construction sector contributed around $37.6 billion to the economy in 2023–24 and employed over 279,000 people. The sector is grappling with mounting challenges, including rising material and labour costs, a shortage of skilled workers and the pressure of delivering major public infrastructure ahead of the Brisbane 2032 Olympics.
Compounding these issues is the ambitious goal of delivering one million new homes by 2044 – a key component of the state’s response to its rapidly expanding population. Considering these pressures, the government has recognised the need to reassess the industry’s settings to support more efficient and sustainable construction practices.
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The Crisafulli Government has realised that the state would benefit from overall productivity improvement. One of their first agenda items was the reinstatement of the Queensland Productivity Commission (QPC).
In March this year, the state government tasked the QPC with conducting a wide-ranging review of the construction industry. The inquiry will evaluate the regulatory, policy and market conditions that influence productivity and cost efficiency across the industry.
The QPC’s review will address a variety of factors affecting productivity across both residential and commercial sectors. A key element of the inquiry will be examining how current regulations and policy settings either facilitate or hinder efficient construction practices. Industry will likely be relieved to hear that Best Practice Industry Conditions (BPICs) are included in the scope of the inquiry.
The inquiry will also investigate planning systems, regulatory compliance requirements and procurement processes, as well as the role of innovation and digital technologies in improving productivity.
The QPC is calling for input from industry groups, unions, developers, local councils and the wider community. This inclusive approach is expected to surface valuable insights from those directly affected by the current settings and those implementing them on the ground.
The Terms of Reference were published on 24 April 2025. The QPC is expected to deliver its final report by 24 October 2025, reflecting the government’s urgency in addressing construction costs and unlocking housing and infrastructure potential.
This review is a great opportunity to forward to an independent body the barriers and solutions to productivity growth.
The government will use the QPC’s findings to inform broader reforms aimed at stimulating economic growth, enhancing housing affordability and ensuring responsible use of public funds on major infrastructure.
Hopefully, we will see government policy align with what industry has been speaking about for years but where their cries have sadly been ignored.