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Total construction work in Australia dropped by 0.7% quarter-on-quarter in Q3 2025, missing market expectations for a 0.4% rise and reversing a marginally revised 2.9% growth in the previous period. The downturn was driven primarily by a sharp drop in engineering work (-5.8% vs 5.5% in Q2), reflecting weaker infrastructure-related activity. In contrast, building construction strengthened (4.0% vs 0.8%), with both non-residential building (3.7% vs 0.7%) and residential work (4.2% vs 0.1%) posting solid gains. Regionally, construction activity declined in Victoria (-2.5%), Western Australia (-1.2%), Tasmania (-3.3%), and the Northern Territory (-2.4%). In contrast, solid growth was recorded in New South Wales (5.7%), Queensland (5.9%), and South Australia (14.0%), underscoring uneven momentum across states. On an annual basis, construction activity grew 2.9%, easing from a 4.5% rise in Q2.