Some economists have cut their forecasts for next week's quarterly growth figures, as data pointed to a sluggish Australian economy even before taking into account the devastating impact of the coronavirus.
Still, Australian financial markets were relatively calm on Thursday after three straight days of hefty falls as fears of the impact of COVID-19 gripped the global economy.
New figures on Thursday showed business investment was unexpectedly weak in the December quarter, following on from Wednesday's equally disappointing construction data over the same three months.
The data feeds into next Wednesday's national accounts for the December quarter.
Economists at JP Morgan trimmed their December quarter forecast to a slim 0.4 per cent, which would keep annual growth to a modest two per cent as a result of a 2.8 per cent drop in business investment and a three per cent fall in construction.
BIS Oxford Economics chief economist Sarah Hunter said Thursday's data confirmed capital expenditure growth will be soft in 2020, with an additional drag from the coronavirus.
Dr Hunter expects the Reserve Bank will need to cut the cash rate further, which is already at a record low 0.75 per cent.
"The pressure will mount on the government to loosen policy in its May budget," she said.
Treasurer Josh Frydenberg has repeatedly warned that bushfires and the coronavirus will have a negative impact on the Australian economy while being vague on what this will mean for his much-promised budget surplus.
But shadow treasurer Jim Chalmers said the collapse in capital expenditure "absolutely destroys" the Treasurer's claim the economy was performing strongly before the coronavirus outbreak.
"Because of the Morrison government's inaction, Australia meets the serious challenges and uncertainties of the fire season and the coronavirus outbreak from a position of weakness, not strength," he said.
Education and tourism are two sectors that are expected to suffer as a result of the travel ban on Chinese visitors and students to stop the spread of COVID-19 in Australia.
Travel retailer Flight Centre has cut its full-year profit guidance following the emergence of the virus to between $240 million and $300 million from a previous forecast range of $310 million-$350 million.
It announced a 74 per cent plunge in its first-half profit on Thursday.
Deloitte Access Economics' initial forecasts of the combined impact of bushfires and coronavirus are for a 10 to 15 per cent drop in international visitors to Australia in 2020.
That is equivalent to between 900,000 and 1.5 million fewer visitors.
"The dreadful bushfire season we've just experienced, combined with the ongoing challenge of the coronavirus, is having a significant impact on the Australian tourism sector," Deloitte Access Economics partner Adele Labine-Romain told AAP.
"While there is continuing discussion about the impact of the coronavirus on the global and Australian economy, the impact on the tourism sector was immediate."
Australian Associated Press