New Report Predicts 19% Rise in Regional Construction Activity, outpacing metropolitan regions

SYDNEY, AUSTRALIA, September 1, 2025 – Construction activity in regional Australia is set to boom, fuelled by rapidly growing renewable energy projects; new data shows regional construction activity is expected to rise at almost double the rate of metropolitan activity in the next two years. The report – produced by industry research company Macromonitor – highlights that the growth in renewable energy infrastructure – solar, wind, pumped hydro, energy storage as well as transmission projects – is expected to be the primary driver.

The report estimates that between 2024/25 and 2026/27, construction activity in regional Australia advances by an AUD 23 billion (USD 14.94 billion), and represents a 19% increase. In comparison, capital cities are anticipating a AUD 12 billion (7%) increase in construction activity in this period. The anticipated growth is driven by an expedited transition to renewables in Australia, facilitated by federal and state government initiatives towards achieving net-zero emissions by 2050.

Regional Growth Levels

The primary driver of the construction boom is the development of renewable energy projects. Central Queensland, New England, and the north of New South Wales are current hotspots for solar and battery energy storage investment. These regions will get a considerable amount of investment for renewable energy projects due to the availability of renewable energy resources and their strategic position in the national grid.

According to Nigel Hatcher, Director at Macromonitor: “The boom in wind, solar, pumped hydro, energy storage and transmission will drive construction in Australian regions over the next two years. Renewable energy is Australia’s biggest area of construction growth, with generally all projects outside of capital cities”.

To paraphrase, other sectors that are adding to growth in the regions include residential construction, roads, rail, and minerals processing. The major infrastructure projects with a wellbeing effect on the regions consists of the Inland Rail freight project, and rail upgrades in Queensland.

Unprecedented Renewable Energy Capacity

The National Electricity Market (NEM) of Australia commissioned an all-time record of 4.4 GW of solar, wind, and storage in the previous financial year. AEMO projects the same will occur for the next few years, adding between 5.2 GW and 10.1 GW annually from now to 2030. This is urgent as the country is on a path to retire coal-fired generation.

State-Level Support and Project Developments

State governments continue to play a supportive role. In Victoria, the Labor government recently advised it approved a new 85 MW solar farm and a 70 MW battery energy storage system in Bairnsdale by means of its Development Facilitation Program (DFP). The park will supply thousands of households in the Gippsland region and about 170 jobs are estimated during construction.
In Western Australia, the federal government’s Capacity Investment Scheme (CIS) has started a tender for 1.6 GW of renewable energy generation and 2.4 GWh of storage. The financial incentives will drive around AUD 4 billion (USD 26.2 billion) in private investment and further strengthen the reliability of the Southwest Interconnected System (SWIS).

Economic and Employment Benefits

Regional communities are experiencing great economic benefits associated with the renewable energy construction boom. Recently, in Shepparton (Victoria) Rossiter Constructions has commenced construction of a 5,000-square-meter industrial business park that is a direct response to their clients’ renewable energy investments. Managing Director Olivia Ross stated, “Shepparton and the Goulburn Valley has become the go-to area for all things solar, battery storage and grid-support. There are new projects coming out of Shepparton every week. The demand for industrial land, specialized contractors, and local supply chains is incredible.”.

Moreover, Macromonitor outlines in their report that residential construction in regional Australia is expected to grow by 18% over the next two years, influenced by declining borrowing costs and the potential for migration procedures towards regional areas, moving away from capital cities.

Future Prospects and Challenges
While the future looks bright, there are challenges. The stability of the grid, regulatory challenges and community opposition to some projects may slow growth, but the overall trend remains strong. Macromonitor’s analysis indicates renewable energy infrastructure spending will peak at more than AUD 36 billion by 2027/28, compared to AUD 13.8 billion in 2020.

Conclusion
Australia’s regional construction boom highlights the power of renewable energy on the economy. As Australia moves towards its climate commitments, regional areas will become the centre of investment, jobs and innovation. With strong government support and record level private investment, the renewable energy sector is transforming the energy system in Australia and supporting sustained economic resilience in non-metropolitan communities.