A widely monitored construction activity private index takes a turn for the worse this June, ending three straight months of progress.

The Housing Industry Association and the Australian Industry Group Performance of Construction Index dropped to 46.4, falling by 6.8 points.

This performance index is right below the 50 point level that differentiates expansion from contraction.

The house building industry incurred the sharpest fall, declining to 43.8 by 13.9 points, breaking its growth streak that was 10 months running.

The apartment industry sector is also in contraction, though more gradually, with the sub index rising to 44 from 42.

Dr Peter Burn, director of public policy of the Australian Industry Group says that the decline in the residential construction sector indicate the rising caution of consumers.

"The sharp fall in recorded activity in the house building sub-sector comes after almost a year of expansion," he pointed out in the report.

"While the result in the housing sub sector relates only to a single month, it could reflect the delayed impact of the withdrawal of the extra first home owner's grant and the cumulative impact of the run of interest rate increases from last October."

The sectors that performed well were engineering (upped to 52.9 by 10.4 points) and commercial (upped to 51.8 by 1.3 points).

Nonetheless, the authors of the report indicate there is a considerable upshot from stimulus measures sustaining the sectors that were non-residential.

While the engineering construction sub-sector recorded a positive turnaround and activity and new orders in commercial construction each extended growth runs, these were not enough to push activity for the sector as a whole into positive territory," Dr Burn noted.

"With employment and new orders falling in other sub-sectors, June marked a turn for the worse for the construction sector as a whole."