Australian business investment fell 1.2 per cent last quarter, against expectations of a modest rise.

Bureau of Statistics capital expenditure figures, which measure business investment in new buildings and equipment, fell 1.2 per cent over the last three months of 2012, seasonally adjusted.

Economist forecasts had centred on a 1 per cent rise, although some analysts were expecting a decline.

Spending on buildings and structures fell 0.6 per cent, while investment in new equipment, plant and machinery slipped 2.3 per cent.

Despite the overall decline, it seems the peak for mining investment has not yet been reached, with spending on new structures in that sector up 2.9 per cent and investment in new plant, equipment and machinery up 2.5 per cent.

After initially dipping slightly, the Australian dollar recovered to be trading at 102.55 US cents around 11:40am (AEDT).