Economic growth staying below trend THE Australian economy is cruising along nicely, but it's having some trouble getting into third gear. Mining and resources investment is not having the impact on the economy that it once did and spending from consumers, business and governments are not picking up the slack. The Australian Bureau of Statistics (ABS) national accounts figures, to be released on Wednesday, are expected to show that gross domestic product (GDP) grew by 0.6 per cent in the June quarter, according to an AAP survey of 13 economists. If the forecast is correct it would be the third consecutive quarter with GDP at 0.6 per cent. The median market forecast for economic growth in the year to June is 2.5 per cent. Westpac senior economist Andrew Hanlan said there were indications that domestic demand was "anaemic" for a fourth consecutive quarter. "The absence of strong gains in mining capex, at a time of below trend global growth, has exposed a lack of strength across the broader domestic economy," he said. There is plentiful evidence of headwinds restraining demand. Mr Hanlan said uncertainty about the federal election and its result weighed on business spending between April and June. Plus, he said, the declining terms of trade - the price of exports relative to the price of imports - was also putting a dent on economic growth. Adding to that, is a fall in government spending as the states and Canberra seek to balance their books. "A positive is that resource exports are trending sharply higher, the dividend from the mining investment boom," Mr Hanlan said. Net exports are set to add to growth for a fifth consecutive quarter, although the size of the contribution is likely to be a modest 0.2 percentage points. JP Morgan economist Ben Jarman said the looming end of the mining investment boom wouldn't be a large drag on economic growth. "While we talk about mining capital expenditure having contributed up to two percentage points to growth last year, both this number, and the expenditure aggregate that comes with it, may be overstated," Mr Jarman said. If so, the underlying drag on the economy as mining activity tapers off, while large, should not be disastrous. With the free lunch from the terms of trade boom over, we expect the labour market to remain under pressure due to weaker profit margins, and the sorry state of household and business sentiment regarding the difficult state of the economy.