A chief economist says a contraction in WA's economy during the March quarter is just the start of a downward trend.

The latest GDP figures show the state's economy shrank by 3.9 per cent in the first three months of the year, second only to the Northern Territory.

BIS Shrapnel's Frank Gelber says the trend will continue for the next four to five years as construction of resource projects end and production begins.

"Basically the economy is slowing from the frenetic pace which it was growing at about a year ago because mining investment has peaked," he said.

"It will now start to make a negative contribution to growth, quarter by quarter, for the next four years as we finish off the current round of resource projects."

The Federal Treasurer Wayne Swan agrees and says the good news is, the drop off wil not be drastic.

"I think this year or next you are at the peak of mining investment," he said.

"I think everyone agrees on that but what you see on the CAPEX figures is it's a plateau, it's not a cliff as it's been displayed in some of the public discussions."

The GDP figures do not include the value of exports.

Mr Gelber says the key figure to look at is the level of investment rather than the level of exports.

"Investment is the thing that employs people," he said.

"The other side of the coin is that exports will continue to grow strongly, perhaps not as strongly as a little while ago, but they'll continue to grow strongly as we put capacity in place and we expand out production.

"The figures are the start of a long downward trend in investment and state final demand, but gross state product will hold."

Mr Gelber says WA's rate of growth is starting to slow and will be slower in the next few years.