Economic research and forecasting group BIS Shrapnel says Australia needs to start preparing for the end of the resources boom.

The company's latest report has found trade-exposed sectors like manufacturing and tourism are shrinking as they make way for growth in mining.

The report states the resources boom and the strength of the Australian dollar are driving structural change in the domestic economy and says investment in infrastructure is crucial to driving future productivity.

BIS Shrapnel chief economist Frank Gelber says rather than channelling the financial benefits from the mining boom into a prosperity fund, they should be invested in infrastructure.

"We need to invest not in a fund which is going to invest passively somewhere, but in infrastructure - both hard and soft - which will underpin productivity ... and which will make us more cost effective when we try to compete with the world later on," he said.

"We're asking the trade-exposed industries to make room for the minerals sector.

"What happens when the mineral boom ends? We need to prepare for that and so we should be setting aside some of the income we're currently producing out of the minerals sector, to make sure that there's a life after minerals.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 4 minutes 18 seconds 4 m 18 s AMWU national secretary Dave Oliver responds to Julia Gillard's decision not to hold an inquiry into the manufacturing industry. ( Kim Landers )

"The Government can't control the private sector but what we need to do now is invest in the things that will make us more efficient and we're not doing that now.

"We're not investing enough to do it and we're not investing in the right sorts of things to do it. We're still in survival mode."

The report follows the Federal Government rejecting calls for an inquiry into the manufacturing sector, putting it at loggerheads with unions concerned about the sector's heavy job losses.

Prime Minister Julia Gillard rejected calls for an inquiry, saying she was not looking to be "held up by having an inquiry. There are things we need to do now."

The move has angered unions, with Australian Workers Union boss Paul Howes maintaining the Prime Minister "made it very clear" she was open to looking into an inquiry.