Australia has seen more than 17 years of continuous economic growth, riding a booming demand for its rich mineral resources from emerging economies such as China.
But a recent slump in demand for exports such as coal and iron ore has hit hard, with the government pumping billions of dollars into the economy to prevent it from tipping into recession.
On Tuesday, Australia's central bank slashed its key interest rate for the fourth consecutive time in three months, cutting one percentage point to 4.25 per cent.
This way bank chiefs hope to divert cash being spent on mortgages into retail spending that will help keep the economy afloat.
Wednesday's economic data covers a period before the rate cuts began.
Meanwhile Kevin Rudd, the Australian prime minister, has announced a stimulus package worth US$6.7bn and has said the government will spend more if needed.