The Australian Bureau of Statistics said on Wednesday that total construction was worth just over $49 billion, seasonally-adjusted, in the three months to the end of September, down 3.6 per cent on the June quarter.

Year-on-year, the decline was 3.7 per cent.

The slump was driven by a 7.3 per cent fall in the value of engineering works, to $24.9 billion, reflecting mainly the mining investment downturn. It came after an improvement in the June quarter, ascribed to the importation of a liquid natural gas module in Western Australia.

For the year, there was a decline of 11.7 per cent in engineering works.

The value of residential and commercial construction, however, inched up 0.6 per cent for the quarter and 6.4 for the year.

Residential construction accounted for $15.5 billion of this, up 2 per cent for the quarter and 12.4 per cent for the year. Non-residential construction, at $8.6 billion, was down nearly 2 per cent on the quarter and 3 per cent year-on-year.

Wednesday's headline figure was worse than market expectations of a 2 per cent drop, but the Australian dollar barely moved on the data, dipping slightly before recovering to around US72.62¢.

Australia and New Zealand Banking group had forecast a "particularly weak" 6.1 per cent decline, dragged down by the mining sector.

"Offsetting some of this weakness is the likelihood of further growth in residential construction," the bank said in a research note before the data's publication.

"Although we believe housing market sentiment is likely to have peaked, the large pipeline of work remaining is expected to push construction higher over the near term."

Some of Wednesday's data feeds into the national accounts, which will be published next week. Some economists are predicting a strong quarter, led by a big contribution from exports.