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Ashley Grogan<\/a><\/p>\n\n\n\n![\"Navigating](\"https:\/\/www.insideconstruction.com.au\/wp-content\/uploads\/2025\/02\/AdobeStock_266633507-1024x683.jpeg\")
<\/figure>\n\n\n\nImage: Sundry Photography\/stock.adobe.com<\/p>\n\n\n\n
Coates has developed a guide to understanding the trends, challenges and opportunities that will shape the construction industry in 2025.<\/p>\n\n\n\n
The Australian Construction Industry Forum<\/a> predicts just 0.9 per cent growth in the construction industry for the year ahead, reflecting slowing economic conditions, cost and inflationary pressure, and continued challenges around the availability of skilled labour.<\/p>\n\n\n\n \u201cUltimately, 2025 will see a shift in several key trends that shape construction. Critically, we are seeing a compositional shift in investment focus, creating new challenges and opportunities across the industry,\u201d says James Lawrence, group manager \u2013 customer and markets at Coates.<\/p>\n\n\n\n This industry outlook explores some of the trends that will define the year ahead and highlights how the rental industry can ease pressure on construction businesses as they navigate the changing landscape.<\/p>\n\n\n\n Despite slight deceleration in building construction, demand remains strong in engineering construction as the industry moves into a utilities-driven cycle. Investment in large-scale renewable energy infrastructure will drive demand for accommodation, amenities and regional development to support these major projects.<\/p>\n\n\n\n \u201cAs the engineering construction boom for long road and rail infrastructure nears its peak, the next phase of growth in renewables, utilities and resources is ramping up,\u201d says Lawrence.<\/p>\n\n\n\n \u201cThe push towards net zero is driving a surge in energy transition investment, with large-scale renewable energy generation, transmission and storage projects being constructed across the country.<\/p>\n\n\n\n \u201cWith equipment, solutions and expertise that align with the growing activity in these sectors, Coates is well-placed to support construction businesses in exploiting these opportunities. This shift will be a core strength for Coates and its customers in 2025.\u201d<\/p>\n\n\n\n Key takeaways:<\/p>\n\n\n\n The commercial and industrial building sectors will experience a decline in growth in 2025. The residential construction sector will also see a slowdown, with Australia\u2019s population-driven housing boom yet to arrive.<\/p>\n\n\n\n \u201cLingering sentiment in the Australian economy is causing some stagnation to remain, particularly around private investment in building construction. Once this sentiment lifts, the market will start to grow again,\u201d says Lawrence. \u201cDeclining activity in these construction markets is expected to be offset by growth in the health, utilities and institutional sectors, including defence projects.\u201d<\/p>\n\n\n\n A shift in major project location from metro to regional areas is another trend currently shaping the construction industry.<\/p>\n\n\n\n \u201cDuring the decade-long transport infrastructure boom, Coates supported many of the country\u2019s largest metro-based capital works projects, including Metronet in WA; West Gate Tunnel<\/a> in Victoria; and the M7-M12 integration<\/a> in NSW,\u201d says Lawrence. \u201cAs focus shifts towards building large-scale renewable energy infrastructure, we are supporting a growing number of projects in regional and remote locations across the country.\u201d<\/p>\n\n\n\n Labour shortages will continue to challenge construction businesses in 2025, exacerbated by historically slow productivity gains.<\/p>\n\n\n\n \u201cCoates is focused on helping customers to improve productivity and efficiency,\u201d says Lawrence. \u201cOur turnkey solutions can ease workforce pressures and help customers to transfer some of the risk.\u201d<\/p>\n\n\n\n How can equipment rental support the construction industry amid challenges?<\/p>\n\n\n\n \u201cWhile the sharp spike in construction material prices has moderated, costs remain high due to tight infrastructure market capacity, increased public debt, and challenges related to the cost of living and wages,\u201d says Lawrence. \u201cHiring equipment presents a strategic solution for businesses looking to reduce capex, manage costs, and scale up or down quickly as needed.\u201d<\/p>\n\n\n\n With rising construction costs, it\u2019s often more cost-effective for businesses to allocate capital to renting instead of purchasing construction equipment.<\/p>\n\n\n\n \u201cBy hiring equipment, customers avoid having to make loan repayments or front the full cost of purchased equipment,\u201d says Lawrence. \u201cThis approach also creates a more predictable and manageable cost structure to support accelerated decision-making.\u201d<\/p>\n\n\n\n Additional benefits of hiring construction equipment include:<\/p>\n\n\n\n To deliver major projects, businesses must be able to meet the growing sustainability provisions in construction contracts. Among a wide range of considerations, in 2025 there will be greater focus on circular construction practices and reducing Scope 3 emissions \u2013 the indirect greenhouse gas emissions (GHG) that occur in a company\u2019s value chain.<\/p>\n\n\n\n \u201cChoosing to hire construction equipment is inherently circular, as the equipment is deployed to multiple projects throughout its lifecycle, improving efficiency and utilisation,\u201d says Lawrence. \u201cHire equipment also gives customers access to the latest technology and innovation to improve utilisation, inform hire choices and work more sustainably and efficiently.\u201d<\/p>\n\n\n\n Coates is uniquely placed to support customers in reducing their GHG emissions with its Greener Choices<\/a> range of battery electric, hybrid, solar, low-pollutant engines and biofuel-compatible equipment across categories including access, materials handling and lighting.<\/p>\n\n\n\n \u201cLighting is a key category on the way to decarbonisation, together with increasing hybridisation of power generation with multiple benefits, including reduced noise and particulate pollution,\u201d says Lawrence. \u201cWe are also tackling temporary site accommodation, typically one of the highest energy users on project sites, with a range of more energy-efficient solutions, augmented by renewables and hybrid power sources.\u201d<\/p>\n\n\n\n With one of Australia\u2019s largest fleets, a national branch network and a deep understanding of what it takes to support the delivery of major projects nationwide, Coates<\/a> looks forward to supporting customers as they navigate 2025.<\/p>\n\n\n\nGrowth in engineering construction<\/strong><\/h4>\n\n\n\n
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Shifting building activity<\/strong><\/h4>\n\n\n\n
Changing project geography<\/strong><\/h4>\n\n\n\n
Workforce challenges<\/strong><\/h4>\n\n\n\n
Reducing capex, improving cash flow<\/strong><\/h4>\n\n\n\n
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Circularity and emissions reduction<\/strong><\/h4>\n\n\n\n