Construction work completed in the September quarter fell 2.6 per cent, led by a sizeable drop in Victorian activity due to its strict COVID-19 restrictions.
In total, $51.2 billion of construction work was completed during the quarter, the Australian Bureau of Statistics said on Wednesday.
Economists’ forecasts had centred on a smaller 1.9 per cent decline.
In Victoria, construction fell by 5.7 per cent to $14 billion during the period, only beaten by the ACT, albeit on a much smaller scale, where work was down 8.7 per cent to $894 million.
Only the Northern Territory recorded growth in the quarter.
Across the country, building construction fell two per cent, with residential work easing one per cent and non-residential declining 3.4 per cent.
Engineering work fell 3.3 per cent.
The data feeds into next Wednesday’s national accounts for the September quarter.
Politicians and economists are pretty confident the Australian economy has started the recovery from its massive economic contraction as a result of the coronavirus pandemic.
The economy sank into recession for the first time in almost 30 years in the first half of 2020, contracting by seven per cent in the June quarter after a more modest 0.3 per cent fall in the March quarter.
Australia has not suffered three consecutive quarters of contraction since the early 1980s recession, when it endured four.
But Reserve Bank deputy governor Guy Debelle told a conference on Tuesday the outlook for the economy remains uncertain and has warned against removing stimulus measures too early.
Reflecting on the global financial crisis 12 years ago, Dr Debelle warned against removing stimulus too early.
“A number of European countries learned this lesson to their cost after the global financial crisis,” he said.
Asked what more federal and state governments should be doing, Dr Debelle said the federal government only announced its budget in October, NSW in the past week and Victoria on Tuesday.
“We will just have to see how that takes effect but also how the economy evolves because there is still a large amount of uncertainty in both directions around the outlook for the economy,” Dr Debelle said.