The Australian Bureau of Statistics said construction work fell in the second quarter.
The total value of construction work dropped 3.8% in the three months to June with residential activity experiencing the biggest decline - down by 6.8%.
The drop in finished construction activity follows a 17.2% fall in building approvals in July, suggesting that successive rate hikes are dampening activity in the construction sector.
Building activity outside the residential sector is expected to remain elevated due to a decent pipeline of public projects, such as schools, train stations and hospitals.
Meanwhile, private sector credit in Australia was up 0.7% month-over-month in July, slowing from 0.9% in June.
On a yearly basis, credit was up 9.1% - steady from the June reading.