Australia's economic activity is still tracking below trend, but figures indicate growth momentum will pick up soon, according to a survey released on Wednesday by the Westpac Banking Corporation and Melbourne Institute.

The annualized growth rate of Westpac/Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, was 4.1 percent in July, above its long term trend of 2.9 percent, Westpac said.

But the annualized growth rate of Coincident Index, which gives a pulse of current activity, was 2.4 percent, below its long term trend of 2.9 percent.

Westpac chief economist Bill Evans said the index pointed to a stronger growth outlook than was expected by Westpac.

"The growth rate in the Index is well below its read of 5.5 percent which it recorded in February but is up from last month (3. 4 percent) and is tracking significantly above its long term trend, " he said in a statement.

The bank's economists expect growth rate to remain at 2.5 percent throughout 2014.

"While the Leading Index tells more about near term momentum, a marked lift in the signal from the index would also have clear positive implications for the growth pulse in 2014," Evans said.

He said the Reserve Bank of Australia (RBA) recently revised down its near term growth forecast which was now in line with Westpac's view.

Evans said the Coincident Index, which provides a gauge of current conditions, rose slightly to a reading of 280.6 in July.

"Current activity is tracking below trend consistent with the current overall soft economic conditions," Evans said.