Private business investment is expected to be among the hardest hits parts of the economy both this year and next as a result of the COVID-19 pandemic.
Deloitte Access Economics warns private investment projects, which have already been weak for many years, are expected to fall by a further 15 per cent in 2020, reaching its lowest point as a share of the economy in almost two decades.
"COVID-19 has led to a collapse in both demand and business confidence, and many businesses are responding by consolidating their operations and making savings where they can," Deloitte partner Stephen Smith says.
"That is likely to see an increase in the number of investment projects being cancelled or delayed, while there will also be fewer new projects announced."
In its latest Investment Monitor, Deloitte Access Economics estimates the total value of projects as of the June quarter - including those under construction, committed to, under consideration or possible - stood at $727.4 billion.
That is a 5.4 per cent drop from the previous quarter to be a limp 1.9 per cent higher than a year earlier.
Mr Smith says business investment will play a crucial role as the economy recovers from its first recession in almost three decades because it drives growth and creates jobs.
"But the timing of the recovery remains highly uncertain, as does the question of whether conditions will get worse before they get better," he says.
Commercial construction may experience a particularly slow recovery due to the increased adoption of work-from-home arrangements and smaller need for retail space because of the growth in internet shopping.
In contrast, mining investment is likely to perform relatively well because of strong demand from China.
Mr Smith says Australian governments will play a fundamental role in stimulating the economy through infrastructure investment.
There are 555 government infrastructure projects either underway or in planning in Australia, worth a combined $314 billion.
Mr Smith said governments are focusing on 'shovel-ready' projects, as well as fast tracking other infrastructure plans.
"Enhanced cooperation between the federal, state and territory governments means that environmental approvals may take only one third of the time they usually do," he said.
This aim would see the total assessment and approval process condensed from three-and-a-half years to just under two.
Record low interest rates and the unemployment rate at the highest level in decades also means the costs of infrastructure are lower than they were.
However, Mr Smith says investment cannot be left to governments alone and companies are eagerly awaiting productivity enhancing reforms that this pandemic may generate, such as tax reform.
"Australian governments would do well to help develop a more competitive, productive and prosperous private sector - one with the confidence to invest in the future," he says.