The Australian economy saw its slowest growth pace in the last quarter of 2011, according to the latest Westpac-Melbourne Institute leading index of economic activity, which paved the way for a measly growth rate at the start of the current year.

The annualised growth rate only reached 2.6 percent by the end January, the Westpac survey said on Wednesday, falling short of the 3.0 percent long-term trend.

The numbers point to the likely pace of economic activities between three to nine months ahead, which obviously will be coming from one of the weakest growth trend seen in Australia over the past 10 years, according to Westpac senior economist Matthew Hassan.

"Data updates for the December quarter reveal a markedly weaker picture through late last year with the annualised growth rate in the Leading Index now seen dropping to just 0.7 per cent in November," Hassan was quoted by the Australian Associated Press (AAP) as saying.

"Over the last six months, the Index growth rate has slowed from a comfortably above trend pace of 4.4 per cent in August to 2.6 per cent in January," Hassan reported.

Also, the new study pointed to the downtrend seen in the coincident index during the last quarter last year, ending at 270.5 by December.

It managed, however, to climb a bit in the following month at 271.7, the Index showed.

And improvements have been seen lately but the current growth pace signals worrisome indicators that were normally seen during the downturn periods, Hassan noted.

"The main components driving the slowdown have been: overtime worked, manufacturing prices, dwelling approvals, and company profits," Westpac said.

For a time too, the share market had managed to pull down key economic indicators, Hassan said, but the sector recovered by the end of the third quarter last year.

The latest data, according to Hassan, should prod the central bank to consider more of the domestic picture in determining its next policy rate on April.

Previous moves by the Reserve Bank of Australia (RBA) have been largely influenced by the economic crisis battering many European economies, including that that of the United States, which have reflected improvements lately, Hassan said.

"In particular, weak GDP (gross domestic product) growth estimates released the day after the March (RBA) Board meeting and more patchy reads on labour market conditions challenge the view that the economy overall is growing at around trend," Hassan stressed.

Hassan, however, is convinced that the RBA will simply sustain its rates hold moves made in February and March that kept cash rate at 4.25 percent.

"We suspect the board will require more evidence of sub-trend growth and a weakening labour market before it is comfortable delivering another rate cut ... With conditions abroad expected to deteriorate as well, our best expectation is for the next rate move to come in May or June," Hassan said.