Westpac Banking (ASX:WBC, NZE:WBC) expects Australia's first-quarter gross domestic product to rise 0.4% quarter on quarter and 1.5% year on year due to lower public spending, according to a May 30 report by the bank.

Public investment is seen to have declined, as large-scale infrastructure projects concluded, while private demand failed to fill the gap, with consumer spending increasing by just 0.1% from the previous quarter, and new business investment up 0.5%, per the report.

Persistent consumer weakness has weighed on business investment, with capital expenditure outside structurally driven sectors declining for seven consecutive quarters, the report added.

The bank noted that this trend will continue, with ongoing uncertainties around trade, tariffs, and global growth.

However, the bank observed that housing construction expanded by 1.5% quarter on quarter as easing capacity constraints allowed for increased activity.