Another interest rate cut is looking less likely as the economy slowly improves and moves away from being driven mostly by mining investment.

In the minutes of its March board meeting, the RBA reiterated its stance that the cash rate will stay at its current level of 2.5 per cent “for some time if the economy was to evolve broadly as expected”.

“Developments since the previous meeting had supported that assessment,” the RBA said on Tuesday.

In January and February the unemployment rate was at a 10.5 year high of six per cent, but the RBA is confident the labour market will improve.

“While the labour market was expected to remain subdued for a while and wage growth had declined, the board observed that this was consistent with conditions in the labour market lagging behind changes in economic activity,” the bank said.

“The decline in the exchange rate seen to date would assist in achieving balanced growth in the economy, though members noted that the exchange rate remained high by historical standards.”

The RBA said that while mining investment is expected to decline sharply in 2014/15 other sectors of the economy are showing signs of life.

“Growth in household spending looked to have picked up slightly in the December quarter, although the pace of growth was expected to remain a little below average for a time,” the RBA said.

“(The RBA’s) liaison suggested that the stronger retail sales seen in the latter months of last year had continued into the early part of this year, though sales growth may have eased somewhat.”

The RBA liaison also found out that construction companies are optimistic about the economic outlook and had reported a pick-up in enquiries from prospective new home buyers.

The bank also noted that resource exports are increasing at a rapid rate and the lower Australian dollar has helped an increase in international tourism arrivals.