This kind of figure is bound to generate negative headlines for New Zealand. Higher oil prices also suggest the deficit could widen further.

Since the Reserve Bank of Australia raised rates in March, the housing market has just been going sideways. Rates are on hold until the third quarter of this year.

The residential housing market is well off its peak now. The Reserve Bank remains on hold for now with domestic demand moderating.

The underlying message from the data is that at the coal face producers are seeing higher costs, but as one moves closer and closer to the consumer these are reduced in both quarter-on-quarter and year-on-year terms.

The moderation is certainly very slow in arriving, even allowing for the usual lag in data, and these sectors' problems are clearly being mitigated by a pick-up in business investment and commodity exports.

They are concerned about inflation first and foremost but they already know that was going to happen because of petrol.