This is expected to worsen with the economy widely tipped to contract in the September quarter, the first downturn since last year's recession.

"The reality is that lockdowns cost the economy significantly," Treasurer Josh Frydenberg told parliament on Wednesday.

"They have an impact obviously on the labour market, they have been impact on economic activity and an impact on people's wellbeing."

The Australian Bureau of Statistics confirmed retail trade dropped 1.8 per cent in June, in line with preliminary figures released last month.

States under longer periods of restrictions during the month saw a larger fall in their retail turnover with Victoria down four per cent, NSW declining two per cent and Queensland off 0.9 per cent.

"The June figures are just the tip of the iceberg," Australian Retailers Association CEO Paul Zahra said.

He said they don't reveal the blow caused by another lockdown in Victoria, as well as those in Western Australia and South Australia, or the current southeast Queensland restrictions, or the prolonged Greater Sydney shutdown.

"The Delta variant has so far put around $12 billion of retail trade at risk, with a billion dollars at risk each week in Greater Sydney alone," Mr Zahra said.

BIS Oxford Economics chief economist Sarah Hunter is expecting a sharp drop in retail turnover in July, with only a partial recovery likely for August.

"Together with a pronounced fall in household spending on other services and the pause in construction in NSW, GDP is likely to contract by around two per cent in the September quarter," Dr Hunter said.

However, retail sales volumes still managed to rise 0.8 per cent in the June quarter, a positive for the second quarter national accounts data due on September 1.

"This should help ensure that June quarter GDP is positive despite the lockdowns towards the end of the quarter," AMP Capital chief economist Shane Oliver said.

ABS director Ben James said households had increased their discretionary spending for much of the quarter, which included a 3.9 per cent increase in cafes, restaurants and takeaway food services retailing.

Virus lockdowns in the nation's two biggest states also took their toll on the construction industry during July, ending a nine-month robust expansion.

The Australian Industry Group/Housing Industry Association performance of construction index fell 6.8 points in July to 48.7.

This takes the index below the 50-point mark for the first time since September 2020, indicating the industry is now in contraction.

However, Ai Group head of policy Peter Burn said the negative national result masked continued growth outside of NSW and Victoria and further expansions in both house building and commercial construction.

"The outlook over the next couple of months will depend heavily on the paths of the COVID-19 outbreaks and the extent of restrictions," Dr Burn said.

Australian Associated Press