A brighter way forward's looking likely for the economy - but the labour market's still trailing behind

Westpac's new report predicts annual growth of more than two percent next year and almost three percent in 2026.

It finds signs of recovery in primary sector industries - and expects the Reserve Bank's recent money policy changes will stimulate spending.

But Chief Economist Kelly Eckhold says the weak labour market will continue to affect households into the next year.

He says the labour market typically lags behind the economy - so the employment rate will continue to rise until the middle of next year.