Business appears increasingly concerned that further weakness is in prospect. The Reserve Bank is very much on hold, weighing the higher inflation reality against the prospect of further slowing in domestic demand and a mild deterioration in the labor market.

Against that, cost pressures and more specifically oil prices remain a concern, as does the availability of suitable labor.

There was continuing strength in mining, equipment manufacturing, nonresidential construction and utilities, ... Against that, residential construction, parts of agriculture and both wholesale and retail report poor and falling business conditions.

The Reserve Bank will continue to monitor higher short-term inflation risks from oil against slowing economic activity. While the bank might engage in occasional bouts of jawboning, we see little prospect of rates moving in either direction for some considerable period.