The Australian economy is likely to grow at an annual pace below trend, according to a survey released on Wednesday by Westpac Banking Corporation and the Melbourne Institute.
The annualized growth rate of the Westpac/Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, was 2.6 percent in October, below its long-term trend of 3.0 percent.
In contrast to the Leading Index, the annualized growth rate of the Coincident Index, which indicates current activity, was 3.5 percent, above its long-term trend of 3.2 percent.
Westpac Chief Economist Bill Evans said the figures were consistent with the bank's predictions of slightly below-trend growth for the economy in 2012.
"It appears that the boost to above trend growth that we saw in July and August has quickly faded," he said.
"The 'around trend' story which has been generally the case since the beginning of 2011 is now appropriate."
Evans said the growth rate in the index has decreased slightly over the last six months, from 3.0 percent to 2.6 percent.
He said strong corporate profits and productivity contributed to economic growth over the period, offset by big drags from manufacturing prices and dwelling approvals.
"With prospects for Europe steadily deteriorating and the interest rate sensitive parts of the economy remaining weak, we believe there is ample scope for a further rate cut in February," Evans said.