Australian business investment spending has yet to show any meaningful recovery from its recessionary levels, with capital expenditure falling 20 per cent over the year and another 9.2 per cent in the September quarter.

It is the largest quarterly decline on record and the fifth quarter in succession where investment has fallen.

The figure was also three times worse than expected with economists tipping a 3 per cent fall over the quarter.

Forward spending intentions across all business sectors for the 2015-16 financial year showed a marginal improvement from a 22.8 per cent fall in the June quarter survey to a drop of 20.9 per cent in September.

The bad news is that the spending strike is much broader than just mining, although there was an uptick in the manufacturing sector.

In seasonally adjusted terms, spending on building and construction fell 9.8 per cent in the September quarter.

Equipment, plant and machinery registered an 8.2 per cent drop while the other selected industries sector, which includes services and hospitality, was down 10 per cent for the quarter.

Not surprisingly, mining fell 10 per cent, while manufacturing showed evidence of a September quarter rebound, up 6.9 per cent.

Market Economics managing director Stephen Koukoulas said there was no other way to see these figures as anything other than "horrid".

"Across the board, it is pretty grim and there's no evidence that a pick-up in business confidence has translated into business investment," Mr Koukoulas said.

"The really disappointing thing about the figures is that it's not solely about the miners."

Capex decline to hit GDP

Business investment — or capex as it is commonly known — feeds directly into the ABS's calculations on economic growth and today's reading is expected to take a large chunk out of September quarter GDP figure released next week.

JP Morgan's Ben Jarman said it was puzzling to see plant and equipment spending so weak, and spending in the non-mining economy rolling over to the degree it had.

Mr Jarman trimmed his forecast for quarterly GDP growth from 0.8 per cent to 0.6 per cent — or 2.25 per cent annualised — on the back of the figures.

Mr Jarman said while that result would not directly challenge the Reserve Bank's policy stance, it would still put the RBA under some pressure to cut interest rates.