The Australian dollar has fallen as economists warn that business investment plans are at "recessionary" levels and may force the RBA to cut rates further.

The ABS estimates that capital expenditure (capex) fell 4.4 per cent in the first quarter of 2015 to $35.9 billion.

Plant and equipment investment was down 0.5 per cent in the March quarter while spending on buildings and structures was down 6.5 per cent.

The key second estimate for next financial year's investment plans is $104 billion, which is 1.4 per cent higher than the initial estimate, but a whopping 25 per cent lower than the equivalent estimate for this financial year's capex.

Economists surveyed by Bloomberg had been expecting a 2.2 per cent fall in actual capital expenditure, and a $115 billion estimate for capital spending next financial year.

The disappointment saw the Australian dollar drop to 76.75 US cents by 2:19pm (AEST), down from daily highs around 77.6 US cents shortly before the 11:30am release.

Capex is one of the most key figures for the interest rate outlook, with the Reserve Bank relying largely on a pick-up in non-mining investment to offset the expected slump in mining investment currently underway.

The news for the RBA is not good, with the drop-off in mining investment steeper than already weak forecasts, manufacturing continuing to deteriorate and the services sector doing slightly worse than at the same point last year.

The UBS economics team has gone as far as to describe the data as being at recession levels, saying it has them rethinking already weak economic growth forecasts.

"The capex outlook deteriorated from already 'bleak' 3 months ago, to now 'recessionary'," the economists warned in a note.

"Hence, looking forward, to support growth Australian dollar depreciation is necessary," with UBS forecasting 70 US cents by year-end.

Further interest rate cuts may be needed: economists

To achieve that depreciation, and in a desperate effort to encourage business investment, UBS believes the Reserve Bank may have to slash interest rates further.

"This data is so bad it would worry the RBA and now raises the risk they cut rates again ahead (but probably not until after second quarter CPI)," the economists forecast.

"Indeed, a recessionary capex outlook is a downside risk to our already well below consensus GDP forecast of 2.2 per cent year-on-year in 2015 and 2.8 per cent in 2016."

The latest estimate two for 2015-16 is up 6.6 per cent compared to the initial estimate for "other selected industries", which covers a lot of the services sector, although it is typical for the second estimate to be higher than the first.

The forward estimate is 10 per cent lower than for 2014-15 at the same point last year and actual spending was down 4.2 per cent in the March quarter.

Manufacturing was a little weaker than services, with investment plans for 2015-16 down 13.3 per cent compared to plans for 2014-15 at the same time last year, but up 4.2 per cent on last quarter's estimate.

Actual investment was down 9.4 per cent in the March quarter due entirely to less spending on buildings and structures.

Today's figures also show the mining slump is even steeper than previously anticipated, with a 4.1 per cent fall in actual spending during the March quarter and with planned investment for 2015-16 35 per cent down on what was expected for 2014-15 at an equivalent point in time.

Expectations for mining investment in 2015-16 have also been lowered 3 per cent since last quarter's survey.

JP Morgan's chief economist Stephen Walters said the data "snuffed out" any glimmers of hope for a quick non-mining investment recovery and all looked "pretty bleak".

"We looked very carefully, but there is nothing positive in the report's details, either," he said.

"Importantly, they indicate that firms outside mining are not yet taking up the slack as investment within resources continues its dive.

"Economy-wide investment likely still will fall in the year ended June 2016, but the decline has been up-scaled to a worrying 21 per cent, from the 15 per cent dive implied in the previous survey."

Mr Walters said the data will have the Reserve Bank leaning towards further interest rate cuts, but he thinks that lower rates are doing little to encourage cashed up firms to invest and the RBA will ultimately decide not to move again.