Home building approvals slumped in January as the impact of the COVID-19 Omicron variant caused a higher level of absenteeism and slowed the administration process.
However, there were further signs the economy is extending the strong rebound from last year's Delta strain lockdowns in the early months of 2022, with exports booming and the construction sector growing again.
"Omicron has not derailed our economy," Treasurer Josh Frydenberg told ABC radio on Thursday.
Mr Frydenberg said in the first two months of this year consumer spending is four per cent higher than a year earlier as issues around workforce absenteeism abated.
"We've seen business conditions improve, business confidence come back and jobs ads are still more than 30 per cent higher than at the start of the pandemic," he said.
The latest national accounts showed the economy surged by a strong 3.4 per cent in the December quarter, matching the rebound after the 2020 recession, which was a 46-year high.
This followed the 1.9 per cent contraction in the September quarter caused by the Delta COVID-19 variant lockdowns.
However, shadow treasurer Jim Chalmers believes the government is again being too complacent about the recovery
"We've had now five or six times where the treasurer has said the economy's roaring again and that it's all fine," he told ABC radio.
"It's why we need a genuine plan to get the economy growing and not just more of these billions of dollars of political patch-ups and rorts and waste and mismanagement that we currently see in the budget."
Building approvals dropped sharply in January for both private sector houses and the more volatile "other dwellings" category.
The Australian Bureau of Statistics said on Thursday total building approvals slumped 27.9 per cent in January, compared to a month earlier, to 12,916 properties.
Private sector housing approvals fell 17.5 per cent to 8712, while other dwellings tumbled 43.6 per cent to 4007.
Housing Industry Association economist Tom Devitt attributed the fall to staff shortages during the Omicron outbreak and a higher than usual uptake of holiday leave.
"The absence of council workers, private certifiers and building business staff will have weighed on the ability to process approvals," he said.
"There are no indications that home building activity is facing weak demand any time soon, despite temporary interruptions from the Omicron outbreak in January."
Construction activity did pick up again in February after the Omicron disruptions during December and January.
The Australian Industry Group/Housing Industry Association performance of construction index rose 7.5 points to 53.4 in February, indicating the sector is again growing with a score above 50 points.
Ai Group chief policy advisor Peter Burn said there was a healthy pick-up in new orders across the construction sector, and while difficulties in supply chains persisted in the month, the pace of decline in supplier deliveries eased.
The ABS also reported a strong improvement in the trade surplus in January due to an eight per cent jump in exports, while imports fell two per cent.
The monthly trade surplus grew to $12.9 billion in January, up from $8.8 billion in December. This was just shy of the record $13.3 billion surplus in July last year.
"Iron ore and coal did have a strong showing - together up by $3.14 billion in the month - boosted by higher prices and volumes," Westpac senior economist Andrew Hanlan said.
"Australia is set to record sizeable trade surpluses over the months ahead. Russia's invasion of Ukraine has led to the prices of a number of commodity prices moving higher."
Australian Associated Press
