(Bloomberg) — Australia’s business conditions strengthened further in April, while labor costs and output prices remained elevated, a combination that suggests further interest rate increases ahead to rein in inflation.

According to a National Australia Bank survey, April’s business conditions (measured by sales and hiring) rose 20 points from the revised 15 in March, a National Australia Bank Ltd. survey revealed Tuesday. NAB reported that confidence fell six points to 10 but is still higher than the long-run average.

The survey revealed that cost pressures are still acute following record-breaking levels of March’s labor and purchase prices. NAB stated that prices have declined slightly from their record highs in March.

“The April survey results show little let-up in the underlying cost pressures,” said Alan Oster,  chief economist at NAB. “Price growth eased somewhat in the April survey, but remained high when looking at the history of the survey, supporting our expectation that inflation will remain elevated.”

After a spike in headline inflation of above 5% for the first quarter, the Reserve Bank of Australia began raising interest rates last Wednesday with a 25-basis point increase. The goal was to raise the cash rate from 0.35% to 0.45%. Markets are anticipating monthly increases to the cash rate that will exceed 3% over the course of 2018.

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“The strong business conditions including trading conditions and profitability show that the economy is faring quite well and so far, demand is holding up in the face of higher inflation,” Oster said.

According to the data, trading conditions increased four points from April to 27, while profitability rose nine points to 22, The employment rate was stable while the capacity utilization rose by 83.9%.

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