This pessimism does matter, if for no other reason than because it has the potential to become self-fulfilling. For example, high-tech equipment and software will have to play an important part in any investment recovery this year; and as we have seen, this category may be particularly sensitive to management beliefs and expectations.
This part of the transmission mechanism appears to be operating pretty much as normal, with the increase in activity over the past 1½ years being in line with our internal forecasts made in the second half of 2013 when the cash rate was first set at 2½ per cent.