The mining investment boom isn't over yet but it will be soon, and when it is, there may not be much there to fill the breach.
Australian business investment rose four per cent in the June quarter, beating economist expectations of a 0.8 per cent rise, according to the Australian Bureau of Statistics figures which cover investment in capital goods such as buildings and equipment.
But while the figures showed mining investment was still chugging along, the more important non-mining investment figures were disappointing, said ANZ chief economist Ivan Colhoun.
"We know there is going to be sharply weaker mining investment over the 2014 calendar year and in 2015, so we think that's not the number to focus on," Mr Colhoun said.
"The key number is to look at what's happening with non-mining investment plans and they are not showing much life at this point in time.
"It's still signalling that there isn't much in the way of this transition from mining investment to non-mining investment going on."
Non-mining investment rose by 0.7 per cent in the June quarter, but was down by 5.3 per cent from a year earlier, in real seasonally adjusted terms.
Mr Colhoun said further interest rate cuts could help to rebalance the economy as the mining investment boom slows down, but a lower Australian dollar would be of more assistance.
CommSec economist Savanth Sebastian said the economy was not ready to make the transition from mining.
"What clearly can be seen is that the Reserve Bank has some work on its hands to disentangle the various parts of the economy," Mr Sebastian said.
"The mining states are pulling back from heady levels of investment but non-mining states and industries aren't filling the void.
"It's still very early days to suggest there's a turnaround taking place in the investment story.
"It's going to take some time for the economy to structurally adjust."
Citigroup chief economist Paul Brennan said the figures suggested business investment remained soft.
"The bulk of the rise in June quarter capex was in mining, but the tide is going out on mining capex so the rise is unlikely to be sustained," Mr Brennan said.
"For economic growth to pick up from its current below trend rate, sectors like consumer and housing will need to do more.
"So far, the pickup in these sectors is very gradual."
