In late July, the Queensland Productivity Commission released its interim Construction Productivity Report. At 342 pages, it is one of the most significant deep dives into the health of Queensland’s building and construction sector in recent memory.
The findings confirm what many of you on the ground already know: this is an industry weighed down by challenges. But what is most striking is how all of these challenges are colliding at once – regulation, procurement, labour shortages, cost blowouts, and financial fragility.
So, what did the Commission find, and more importantly, what does it mean for your business?
A sector under pressure
The report highlights that the construction industry is grappling with overlapping issues that make it difficult to deliver the current pipeline of work. Here are some of the key themes:
Builders, developers, and subcontractors are being asked to navigate one of the most heavily regulated environments in the country. Multiple Acts, inconsistent council rules, and ever-changing compliance obligations make approvals slow, costly, and often unpredictable.
For smaller operators, especially, this maze of red tape eats into margins and creates uncertainty.
One of the other key areas where regulation is too heavy-handed is in the QBCC Minimum Financial Requirements space. Whilst the Queensland system has some significant advantages when compared to other states, the reporting burden for smaller businesses is excessive and has to change. We are glad to see that the Productivity Commission has flagged the need for reform in this space.
Queensland Government procurement practices were singled out as being overly rigid, prescriptive, and difficult to navigate. Risk is often pushed unfairly onto contractors, innovation is stifled, and smaller or regional firms are being locked out of opportunities.
Legacy conditions like the Best Practice Industry Conditions (BPIC), although paused, have left their mark by inflating costs and embedding restrictive workplace rules into enterprise agreements.
As we all know, Queensland is in the middle of a housing shortage, yet the very systems designed to regulate supply are slowing it down. Lengthy approval processes, restrictive zoning, and inconsistent application of building codes are preventing housing from being delivered where it is most needed.
Innovative solutions like modular or offsite construction are also being held back by red tape and fragmented local government rules.
There simply aren’t enough skilled workers to deliver the pipeline of projects ahead. Apprenticeship completions remain low, licensing requirements are outdated, and rigid workplace arrangements (like fixed RDOs and whole-site stoppages for isolated safety issues) are cutting productivity even further.
Margins are shrinking. Builders are absorbing rising material costs, longer delays, and inconsistent project cashflows. The report noted insolvencies are becoming more common as businesses struggle to keep up with the financial pressures.
The report doesn’t just list industry-wide challenges — it underlines the day-to-day reality for builders, subcontractors, and developers.
For many businesses, this mix of pressures makes the financial side of construction just as important as the build itself.
While the interim report paints a sobering picture, it also opens an important conversation about how the industry can adapt and improve productivity. It is not just about identifying problems, but about creating a pathway forward.
At this stage, the sector is digesting the findings and preparing to respond. Alongside groups like the Master Builders Association Queensland, our team, and other industry representatives are pushing to ensure the report translates into meaningful reform with the government. The process now is about shaping practical, workable solutions that lift productivity and create a more sustainable construction environment for everyone.
The July report confirms the pressures builders and developers have been facing for years – but it also opens the door for change. For businesses that get their financial house in order now, there’s a chance to come out stronger. By staying compliant, managing cashflow, and making smarter project decisions, builders and subcontractors can protect themselves from the worst impacts and position for growth.
The pressures on Queensland’s construction sector aren’t going away anytime soon. But with the right strategies in place, you can stay ahead of the risks and safeguard your business.
As construction accounting specialists, we work with builders, subcontractors, and developers every day to strengthen cashflow, manage compliance, and plan for growth – even in challenging conditions.
📞 Book a consult with our team today to explore how these changes might impact your business and what you can do now to prepare for the future.
