The value of construction work done unexpectedly slumped in the September quarter, led by a drop in completed residential buildings compared with the previous three months.

Seasonally adjusted data from the Australian Bureau of Statistics (ABS) on Wednesday show total construction work in the September quarter was $41.4 billion. While a 7.1 per cent year-on-year increase, it was a 2.1 per cent decline compared with the June quarter.

Economists' forecasts had centred on a 2.1 per cent rise.

Residential building work was the weakest sector, dropping by 6.1 per cent to $11.5 billion.

Non-residential building showed a modest 1.5 per cent increase, while engineering work was down by 1.4 per cent.

Total building work fell by 2.7 per cent to $21.7 billion in the quarter.

Many economists had downgraded their economic growth forecasts as a result of the poor figures.

ABC news reported that Westpac's economics team has slashed 0.3 percentage points of its GDP forecast. At 0.6 per cent, the new figure would be much weaker than last quarter's 1.2 per cent economic growth.

ANZ's economists are even less optimistic about how Australia's economy performed in the September quarter, according to ABC news.

"The greater than expected fall in residential construction work done has made a dent in our quarterly GDP estimate. At this stage, we estimate growth of just 0.1 per cent quarter on quarter," said Amber Rabinov, one of ANZ's senior economists, ABC reported.