The scramble by resource companies to boost capacity to meet world demand and take advantage of record commodity prices is clearly providing a major impetus to State growth.
It looks like the economy picked up in the second quarter. The leap higher in commodity prices is helping underpin profits and driving export earnings and investment.
It's encouraging to see an upgrade in the outlook and business investment will be supportive of economic growth.
This suggests that approvals are bouncing along the bottom, with virtually no change over the last five months.
It's significant for the outlook for the economy if housing approvals turn the corner. In the second half of the year, housing will switch from being a drag on the economy to a positive.
We suspect that will be the only move this year.
The weakness in the household sector of the economy has helped to contain core inflation despite rising energy and upstream prices. I think while that situation persists, interest rates will certainly be on hold.
I guess the big surprise is that inflation isn't higher, given the environment that we're in.
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