Australia's economic growth was sluggish in the March quarter, and that pace is likely to continue as the peak in mining investment looms.
Gross domestic product grew by 0.6 per cent in the first three months of the year, the Australian Bureau of Statistics said, below the market forecast of 0.8 per cent.
The annual pace of growth was 2.5 per cent, the first time it was below three per cent since the last quarter of 2011.
There is evidence from the data that Australia's mining boom is moving into a new phase.
In recent years, a lot of mining and resource projects have been under construction, which was the main driver of economic growth.
That boom is expected to peak some time in the next 12 months, but those new projects will start production and there will be a lift in exports.
It is also hoped there will be a lift in other sectors of the economy like home construction and retail spending, helped by the falling Australian dollar and lower interest rates.
JP Morgan chief economist Stephen Walters said the contribution from mining investment in the March quarter was fading with output in the mining state of Western Australia diving.
Economic growth got a boost from a lift in mining exports, helped by a temporary rise in commodity prices and a small lift in consumer spending.
"In fact, without the big boost from net exports, the economy would have contracted last quarter," Mr Walters said.
"The lack of acceleration in output growth last quarter will be unwelcome news for policy makers keen to see activity outside mining lift.
"We expect the recent sluggish, sub-trend pace of output growth to more or less be sustained over the remainder of this year and next as the economy struggles to transition seamlessly to a post mining investment boom world.
Mr Walters is forecasting annual economic growth to be 2.5 per cent in 2013 and 2.75 per cent in 2014.
Commonwealth Bank senior economist Michael Workman said the economy would have gone backwards in the March quarter without the contribution from net exports.
"Today's relatively soft growth figures will support the calls for another Reserve Bank of Australia interest rate cut in coming months," he said.
"The good news story is the strong lift in resource export volumes after record investment.
"Retailers benefited in the quarter, while services providers felt left out.
"New dwelling investment is partly responding to lower rates, but alterations and additions spending is not."
The RBA last cut the cash rate at its board meeting in May, to a record low of 2.75 per cent after making four reductions in 2012.
Most economists are expecting another rate cut before the end of 2013.
