Australia's economy is expected to show an upward trend because companies earned well in the second quarter.

The Australian Bureau of Statistics (ABS), in its business indicators report, revealed an increase of 18.9 percent in the gross operating profits of companies and a 2.2 percent rise in wages and salaries from April to June.

The ABS report also indicated an inventories valuation adjustment (IVA) of $2956 million. The amount is is $1455 million more than the March quarter 2009 IVA of $1501 million.

The trend estimate for inventories reached 0.3 percent in the same quarter, 0.2 percent short of economists expectations. The seasonally adjusted estimate for manufacturing sales and goods fell by 6.9 percent, while the trend estimate for wholesale trade sales of goods and services decreased 0.9 percent.

Senior economist Michael Workman of the Commonwealth Bank of Australia (ASX: CBA) considered the second quarter data as stimulants for Australia's gross domestic product (GDP). He insisted the data “has strong implications for Wednesday's gross domestic product (GDP) figure.”

According to Workman, the increase “was quite an extraordinary” rise for the period and it reflected the influence of the mining industry. Based on the data, though, the senior economist forecasts a 50 percent probability of a rise in interest rates by the end of the year.

Workman said, “The market is currently fully pricing in the cash rate remaining at 4.5 per cent till November 2010.”