The Westpac Bank-Melbourne Institute leading index of economic activity dipped 0.3 points to 280.9 in January, but that followed a rise of 2.5 points in December.
Annualised growth in the index slowed to 3.5 percent, from 4.6 percent in December, just above the long-run trend of 3.3 percent. Much of the slowdown was due to a steep fall in home building approvals and a drop in overtime work, both of which were depressed by the flooding.
"January marks the first Index reading to clearly show a significant impact from severe weather events," said Matthew Hassan, a senior economist at Westpac.
He said further volatility was likely from the Yasi Cyclone and now the massive earthquake in Japan. "This will make getting a read on underlying economic trends more difficult than normal", Mr Hassan said. The coincident index, which attempts to measure the current pace of growth, rose 0.4 points to 266.8. Its annualised growth rate slowed to 2.0 percent.