New ABS data shows 72 per cent of Australian businesses have been hit by rising fuel costs and supply disruptions. For builders, the pressure is not abstract. It is showing up in operating costs, delayed schedules and decisions about workforce.

The Australian Bureau of Statistics does not usually make headlines that hit builders in the stomach.

But the latest Survey of Business Conditions and Sentiments, released on 26 May 2026, is different. It is the first major dataset to quantify what the closure of the Strait of Hormuz has done to Australian businesses across the economy.

The numbers are blunt.

Seventy-two per cent of Australian businesses have been negatively impacted by fuel prices and supply availability. One in six have experienced supply chain disruptions. Half of all businesses report that operating expenses have risen, with fuel costs and freight the most frequently cited reason.

For construction, which already operates on tight margins and depends on a complex web of deliveries, suppliers and mobile plant, this is not background noise. It is a direct pressure on the bottom line.

What Closing the Strait of Hormuz Actually Means

The Strait of Hormuz is a narrow waterway between Iran and Oman. Roughly 20 per cent of the world’s traded oil passes through it. When it closes, or when the threat of closure becomes credible, the ripple effects move fast.

Global energy markets reprice immediately. Shipping routes change. Freight costs climb. Businesses that rely on petroleum products, including construction fuels, diesel, bitumen, and synthetic materials, feel the impact before most of the broader public registers what is happening.

Australia is not isolated from this. We are a net importer of refined petroleum products. We do not produce enough domestically to buffer global price shocks. When global supply is threatened, Australian pump prices, and the wholesale fuel costs that flow through to builders and trades, move accordingly.

The ABS data is now confirming what many in the industry have already been experiencing on site and in their accounts.

Half of all Australian businesses report operating expenses have risen. Fuel costs and freight are the most commonly cited reason.

Construction Is in the Middle of It

The ABS data breaks down fuel and freight impacts by sector. Construction is clearly within the affected group, alongside transport, agriculture and wholesale trade.

This makes sense when you think about what a residential build actually involves.

Concrete is delivered by truck. Timber arrives by semi-trailer. Frames are craned in. Site supervisors drive between jobs. Machinery runs on diesel. Subcontractors travel to site and pass their fuel costs on through pricing. In a business built on movement, a sustained increase in fuel costs is not a one-line item. It is embedded in almost every stage of delivery.

For builders who locked in fixed-price contracts before the current cost environment took hold, this is a particularly uncomfortable position. Margins that looked workable six months ago are now being eroded by cost increases that were not modelled at the time of signing.

For builders still quoting new work, the challenge is how to price accurately when input costs are moving faster than normal estimation cycles allow.

What Businesses Are Actually Doing

The ABS data also captures how businesses are responding. The picture is telling.

About 60 per cent of businesses have made changes to operations in response to fuel prices or availability. The most common response, reported by 48 per cent of businesses, has been absorbing cost increases rather than passing them on. Eleven per cent have increased prices. Six per cent have changed or delayed production targets or schedules. Six per cent have implemented a fuel surcharge or levy.

For builders, this breakdown reflects a familiar tension.

Absorbing costs protects client relationships and keeps projects moving. But absorbing too much, for too long, is how building businesses end up in trouble. The industry has seen this pattern play out before. Businesses that absorb without limits eventually hit a wall.

The workforce data is also worth reading carefully. Around 28 per cent of businesses made workforce changes in response to fuel conditions. Fifteen per cent reduced or suspended non-essential travel to cut consumption. Nine per cent reduced the size of their current workforce.

In construction, where trades already travel between multiple sites and supervisors cover wide geographic areas, cutting travel is not always a simple option. But it signals that businesses are making real operational decisions, not just monitoring.

Nine per cent of Australian businesses have reduced their workforce in response to fuel prices or availability. That is not a rounding error.

The Supply Chain Disruption Layer

Beyond direct fuel costs, one in six businesses has experienced supply chain disruptions as a result of the Strait of Hormuz closure.

For construction, this adds a second layer of pressure that is harder to price and harder to plan around.

Material availability has tightened across several product categories. Delivery windows have extended. Products that once arrived on predictable schedules are now subject to uncertainty. And when materials do not arrive on time, projects stall, trades sit idle, and costs compound.

This is the kind of disruption that does not show up cleanly in a single line item. It shows up as a delayed handover, a rescheduled trade, a client calling to ask why their build is running behind. It shows up as friction, and friction costs time and money.

Builders who have experienced the supply chain chaos of 2021 and 2022 will recognise the dynamics. The causes are different this time. The effects are familiar.

Revenue Is Already Falling for Many Businesses

The ABS data also captures revenue expectations. Over one third of businesses, 36 per cent, reported that revenue had dropped over the past four weeks. More than a quarter, 27 per cent, expect revenue to fall over the next four weeks.

That is a significant cohort of the economy operating in contraction at the same time.

For builders, falling revenue in the broader economy eventually flows through to the pipeline. When clients lose confidence, delay decisions, or find that finance has become harder to access, new project enquiries soften. The connection between economic conditions and building activity is not instant, but it is real.

Builders who are watching their order book and noticing longer lead times or quieter inquiry periods are not imagining it. The macro conditions are real and the ABS is now quantifying them.

What Builders Can Control

None of this is comfortable to read. But it is useful.

Data like this allows builders to make decisions based on evidence rather than intuition. And there are things within a builder’s control, even in a cost environment being driven by events happening on the other side of the world.

Contracts being negotiated now should include fuel and freight escalation provisions where possible. Fixed-price contracts signed without these provisions are carrying risks that were not priced at the time. That conversation with clients and solicitors is worth having before it becomes urgent.

Cash flow discipline matters more in this environment, not less. When operating costs are unpredictable, the buffer between incoming and outgoing money is what keeps a business operational when a delivery cost spikes or a stage payment is delayed.

Supply chain relationships are worth protecting. Builders who have invested time in relationships with suppliers and trades have more visibility into what is coming and more flexibility when disruptions hit. That visibility has practical value right now.

And documentation is insurance. Every variation, every cost change, every delivery delay should be recorded. If disputes arise downstream about why a project ran over time or budget, clear records are what protect a builder’s position.

The Bigger Picture

The closure of the Strait of Hormuz is a geopolitical event. Its effects on Australian construction are economic, operational and, for some businesses, existential.

The ABS data released today does not make that easier. But it does make it clearer.

Seventy-two per cent of Australian businesses have been impacted. Over one third have seen revenue fall. Half are carrying higher operating costs. One in six has experienced supply chain disruption.

These are not projections. They are reported outcomes from businesses operating right now.

For builders, the task is the same it always has been in difficult conditions. Run a tight operation. Protect cash flow. Communicate clearly with clients. Document everything. Make decisions based on what you know rather than what you hope.

The noise around this will get louder before it gets quieter. The builders who come through it best will be the ones who read the data clearly, adjust early, and do not wait for conditions to improve before they act.

Source: ABS Survey of Business Conditions and Sentiments, May 2026. Published 26 May 2026.

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General Information Only: This article is intended for general informational purposes and does not constitute financial, legal, or business advice. Builders and trades professionals should seek independent advice relevant to their specific circumstances.

Author: TGB Editorial