The RBA has stated that improving business surveys highlight the growth turn-around in the economy, so yesterday's disappointment should kill off any talk of growth returning to a trend pace in the next 18 months, especially as two key stressed points are underweighted in this survey, namely mining and government. These sectors are likely to keep domestic growth at a sub-3% pace this year and next year as the huge mining investment overhang unwinds. In this environment the non-mining economy is likely to improve as previous RBA rate cuts work their way through the system, but growth is not likely to improve a great deal from here. Hence, the key for investors is determining where the potential for earnings surprise is, and cyclical sectors appear best placed to benefit from any favourable macro currents, whereas simple yield plays are likely to highly scrutinised for earnings and valuation risk. (VIEW LINK)