The first week of August appears gloomy when capital expenditure fell from the first to the second quarter by 4 percent in seasonally adjusted terms.

The Bureau of Statistics data pegged the fall on the construction, wholesale, and retail trade sectors. Economists, however, are placing the blame on the proposed mining tax.

Mining investments rose to 2.6 percent. Colonial First State's Stephen Halmarick said, “Given the overall outlook for mining you would've expected a much larger increase.”

Halmarick expects the weak capital expenditure during the second quarter will pull down next week's gross domestic product (GDP).

"Today's number is certainly going to subtract a little bit from people's expectations on GDP, but I would think that we're going to get a number maybe not as high as 1 per cent on the quarter, but certainly better I would think than the 0.5 per cent growth we had the previous quarter," he said.

TD Securities analysts Annette Beacher and Roland Randall, however, are optimistic of remaining months for the mining sector. The analysts said China is outweighing the potential cost of the mining tax.

“Mining is once again most aggressive in its expansion plans. On our calculations, the sector will spend around $60 billion in 2010-11, 74 percent more than it did in 2009-10,” they insisted. The forecast investment figures equate to around 5 percent of the nominal GDP.