Australian exports fell sharply in July after being one of the rare bright spots during the economy’s crash during the June quarter that confirmed the nation’s first recession since the early 1990s.

Australian Bureau of Statistics data on Thursday showed the international trade balance of goods and services surplus almost halved in July to $4.6 billion from $8.1 billion in June.

This was the result of a four per cent fall in exports in the month compared to a seven per cent surge in imports.

New construction data also showed the industry remains in deep decline, not helped by the harsh COVID-19 restrictions in Victoria.

The Australian Industry Group/Housing Industry Association performance of construction index fell 4.8 points to 37.9, well below the 50-mark that separates contraction in the sector from expansion.

“The sharp fall in activity in Victoria was a major factor in the downturn while border restrictions in other states have hampered builders and constructors who are reliant on interstate supplies and the availability of tradies from across borders,” Ai Group head of policy Peter Burn said.

The figures come hot on the heels of Wednesday national accounts which showed the economy shrank by seven per cent in the June quarter, the biggest contraction since the late 1990s.

The data showed a massive drop in consumer spending and in business and building investment, and could have been a lot worse if not for a solid contribution from exports in the quarter.

Leading economists are bracing for a bumpy road to recovery.

Westpac chief economist Bill Evans said the June quarter national accounts were “devastating but not an unexpected collapse”.

“Clearly we won’t see another collapse in consumer spending but we have seen this movement to stage four restrictions in Victoria,” Mr Evans said about the outlook for the September quarter.

He expects Victoria will be a big negative on growth in the September quarter, leaving the national result broadly flat.

But in the December quarter, with Victoria’s restrictions wound back to a degree, it could see the national economy grow by 2.5 per cent.

Against the backdrop Treasurer Josh Frydenberg is stitching together a federal budget to be delivered on October 6.

Mr Frydenberg has flagged bringing forward already legislated personal tax cuts to put more money in people’s pockets.

But the national accounts figures showed people are unable or unwilling to spend money during the coronavirus pandemic and are instead saving as much as they can.

“We need a jobs plan, and tax cuts being brought forward on their own is not a jobs plan,” shadow treasurer Jim Chalmers told ABC TV.

More than one million people are already unemployed because of the coronavirus pandemic and another 400,000 could join the dole queue before Christmas.

The Reserve Bank expects unemployment to reach 10 per cent by the end of the year.