Indicator flags plodding economic growth

The Westpac-Melbourne Institute leading index of economic activity has flagged growth nearly as fast as the long run average, possibly until well into 2017.

An indicator of the economy's likely path points to more plodding economic growth.

The Westpac-Melbourne Institute leading index of economic activity in July was marginally under its long-run average in July, which the bank's chief economist Bill Evans says suggests growth over the coming three to nine months will be "almost around trend".

Mr Evans said the index is consistent with Westpac's forecast of annual economic growth steady around three per cent for the rest of 2016 and through 2017, an outlook also in line with the Reserve Bank's latest forecasts.