Construction Industry Remains Resilient Despite Economic Pressures, Kennards Hire Research Reveals

Sydney, Aus - 12 August 2026 - Australia’s construction industry is remaining resilient despite ongoing economic pressures, with new research from Kennards Hire revealing most industry leaders remain confident in the sector’s long-term future, while adapting their operations to keep up with cost pressures and project complexity.

Now in its 5th year, the 2026 Kennards Hire Construction Confidence Check, surveying over 400 senior Australian business leaders and decision-makers from construction businesses, found 73 per cent believe the industry has remained stable over the past 12 months and 23% describing it as very stable.

The findings demonstrate that the construction industry is optimistic about future opportunities, but is taking a more measured approach to investment, project delivery and risk management.

“Businesses are continuing to invest in the future, with leaders in the industry still planning for growth, while focusing on flexibility, productivity and operational resilience amid ongoing sector challenges. It requires an evolved approach to get the work done - from end-end support and specialist solutions through to additional training for employees,” said Kennards Hire General Manager of Sales, Tom Kimber.

“The construction industry has always demonstrated an ability to adapt, and these findings show businesses are actively looking for new ways to work smarter, through technology, flexible operating models and better management of resources.”

Confidence remains strong as infrastructure, housing and technology drive future growth

While economic conditions remain challenging, industry leaders continue to identify significant opportunities ahead.

Infrastructure investment emerged as the strongest anticipated driver of industry growth over the next five years, cited by 42 per cent of respondents, followed by AI/digital technology adoption (37%) and government policy (37 per cent).

Economic uncertainty, planning delays and labour shortages remain key concerns

While there remains high confidence in future growth, industry leaders acknowledge a range of challenges that could impact performance over the coming years.

Among them, 48 per cent of respondents ranked economic uncertainty affecting investment and housing demand among the biggest threats to the industry, while 47 per cent pointed to government policy and planning delays and 43 per cent cited skilled labour shortages.

The report also highlights differing experiences for businesses across the industry, with established firms (those operating for over 10 years) found to operate differently to their younger counterparts.

Newer companies (operating for less than 10 years) are more likely than more established companies (10+ years) to prioritise reliance on contractors or specialised external expertise (39% compared to 29%) as well as cite poor communication or scope changes (42% compared to 26%).

Technology investment and operational flexibility are becoming competitive advantages

The research found businesses are actively responding to these pressures by adopting new technologies and more flexible operating models. Over one third of respondents plan to invest in AI to improve project management and delivery over the next 12 months, making it the most common strategy for maintaining competitiveness and driving efficiencies.

At the same time, equipment hire is increasingly being viewed as a strategic business decision, rather than simply an operational necessity. When asked about the factors influencing the decision to hire rather than own equipment, flexibility across projects (45%) and cost savings or cashflow management (42%) emerge as the most commonly cited drivers.

ESG priorities continue to evolve beyond environmental compliance

The industry’s focus on ESG is evolving beyond environmental compliance, with Australian construction businesses placing greater emphasis on workforce development, social impact and responsible business practices. The report found that compliance and reporting (41%), social impact/work initiatives (38%), sustainable materials sourcing (36%) and energy efficiency (35%) as the most prioritised ESG initiatives amongst Australian construction businesses.

An industry focused on resilience and long-term success

The 2026 Kennards Hire Construction Confidence Check highlights an industry that is not standing still in the face of uncertainty.

As businesses balance rising costs, changing market conditions and increasing project demands, the ability to remain flexible, adopt new technology and build resilience will be crucial to long-term success.

For more information, requests for interviews with a Kennards Hire spokesperson or further data, please contact:

Liz Eassie | elizabetheassie@kennards.com.au | 0418 673 196