In its quarterly Investment Monitor, Deloitte Access Economics said a recent spurt of investment in new engineering and construction works will not last and businesses concerned about the outlook are holding back on further outlays.

"Measures of business confidence have fallen to their lowest levels since late 2021 in the face of the dual challenge of rising costs and falling demand," Deloitte Access Economics partner Stephen Smith said.

"This is more than offsetting the long list of positives for investment ranging from robust growth in profits [and] high levels of capacity utilisation [to] elevated commodity prices and the large public infrastructure investment pipeline."

The investment update came as Australian Bureau Statistics figures showed building approvals surged 18.5 per cent in December, driven by a big jump in the volatile apartments segment of the housing market.

The ABS reported approvals for multi-unit dwellings soared 56.6 per cent and were particularly strong in New South Wales and Victoria.

In trend terms, 495 new dwellings were approved in the ACT in December, up 13 per cent from the previous month.

Despite the spike in apartment approvals late last year, ANZ senior economist Adelaide Timbrell said over the December quarter they were down 4.3 per cent and she expected the downward trend to continue.

"While Australia's strong expected net migration through this year will limit the total decline in building approvals, falling home prices and rising rates will reduce appetite for new dwelling developments," Ms Timbrell said, adding that construction would nonetheless remain strong given a considerable backlog of projects.

Governments are doing their bit to keep builders busy.

Mr Smith said that, on current plans, governments were set to spend more than $250 billion on infrastructure projects through to mid-2026, with much of that in transport, health and education.

Mining investment would be subdued despite current high commodity prices because the industry does not expect them to last.

But Mr Smith said improved certainty around the nation's energy policy was encouraging a significant lift in investment in renewable power projects.

"We have been through a period in which there has been some uncertainty and getting stability is better in terms of investment," he said.

The government has said it is keen to encourage sustainable wages growth. To achieve this, its needs to bolster the nation's desultory productivity rate.

Mr Smith said lifting business investment was key because the new and improved technologies, skills and infrastructure it provides would raise the output and earnings of workers.

"Investment plays a key role in increasing the potential rate of economic growth," he said. "More investment today means better machinery, equipment, hospitals, schools, transport infrastructure and workplaces in the future. That translates to faster rates of economic growth and better standards of living."