Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

Much of the recent focus among the economist fraternity has been on Australia’s economic performance during the September quarter, and whether an expected contraction will extend into the December quarter.

But new construction figures released on Wednesday suggest economic growth in the June quarter may have also been pretty poor, or even negative.

The June quarter national accounts are due on September 1.

Total construction work completed during the June quarter – which will feed into the growth equation – rose by a much smaller-than-expected 0.8 per cent, with the residential building sector surprisingly going backwards.

Economists had expected a 2.8 per cent rise in the quarter.

Total construction rose to $52.9 billion in the June quarter to be up 0.4 per cent on the year.

National Australia Bank economist Taylor Nugent said this presents a downside risk to his bank’s overall growth forecast for the June quarter of 0.2 per cent, which may now turn out to be a flat or even a negative result.

A range of other quarterly data is due in the next week.

Total building construction rose 0.1 per cent to $30.6 billion, but residential building declined 0.1 per cent in the quarter to $19 billion.

Economists had expected another strong result for housing construction, given ultra-low interest rates and the lingering impact from the federal government’s HomeBuilder program.

“The fall in activity over the June quarter points to supply chain issues weighing heavily on the sector,” BIS Oxford Economics economist Nicholas Fearnley said.

“With both labour and material capacity constraints in play, significant project delays and cost overruns can be expected, especially given the elevated pipeline of work flowing from the now concluded HomeBuilder incentive.”

Non-residential construction did rise 0.3 per cent in the June quarter to $11.5 billion, while engineering work rose 1.8 per cent to $22.3 billion.

Treasury and economists are predicting a downturn of between two and four per cent in the September quarter as a result of widespread virus lockdowns.

Two quarters of economic contraction are classified as a technical recession.

Treasurer Josh Frydenberg continues to pin his hopes on a rapid recovery from the September quarter downturn.

“As for the December quarter, I’m hoping that it rebounds strongly off the back of the easing of restrictions,” Mr Frydenberg told the Seven Network on Wednesday.

“We know from our experiences in the economy last year, we rebounded strongly.”

But he says the key is to stick to the national plan for COVID-19 restrictions to ease once vaccination rates reach 70 per cent and 80 per cent of the population over the age of 16.

Just over 30 per cent of Australians are fully vaccinated at present.

Australian Industry Group chief executive Innes Willox believes the point has already been reached for governments to look seriously at opening borders and removing barriers to business travellers more rapidly.

“Employers across the country have put investments on hold for too long,” Mr Willox said in a statement.

“They are losing business opportunities to their overseas competitors whose economies and countries are open for business, while Australia is locked tight as a drum.”