Recent reports have shown varying levels of growth in the economy amid fears of a return to the Howard era recession because of proposed cuts in the public service.

However, economists and business groups predict the capital will not suffer downturns such as those after mass redundancies in 1996 because of, in part, changes to the city's population and its demographics.

CommSec economist Savanth Sebastian said although there were signs of weakness in coming months, Canberra's prospects for the medium term were more positive.

"Certainly the next six months are going to be tough, but you'd have to think that, following that, there should be an improvement in activity," he said.

"You wouldn't say it's in dire straits by any means."

His comments follow CommSec's State of the States report in January, which listed the ACT as having the second weakest trend in annual economic growth rate of all the states and territories.

Comparing the latest readings of economic indicators with decade averages, the report's authors found that while the ACT also lagged in terms of retail trade and construction work, it was the strongest performer for housing starts, wages and population growth.

Both housing finance and dwelling starts reported higher than decade averages, with new housing construction starts almost 57 per cent higher than decade averages.

The September 2013 quarter also started 27.4 per cent higher than a year earlier, the strongest annual gain in two years.

The increases in housing finance and dwelling starts are in contrast to the capital's labour market, which ANZ economist Cherelle Murphy said was softening.

The ACT's jobless rate remains the lowest in the country, at 4 per cent, although CommSec listed it as higher in percentage terms than four other state and territory economies when compared to Canberra's decade averages.

Ms Murphy said although a number of economic indicators were close to long-term averages, the labour market had suffered from uncertainty about job losses.

"There are some signs of weakness in the labour market already," she said.

"If we see further cuts it's not going to be a particularly good outcome for the labour market and that will have implications down the track for population growth."

Ms Murphy said public service cuts and lower confidence caused a dip in population growth in 1996, but local business groups have not predicted a similar trend for coming months.

Canberra Business Council chief executive officer Chris Faulks said both the profile of the public service and the city had changed over the past 18 years.

Ms Faulks said most of the proposed voluntary redundancies were expected to be accepted by baby boomers, who were likely to stay in the city for retirement, therefore there would probably not be a repeat of the exodus in 1996.

"Canberra is a much more mature city in terms of medical services and cultural activities," she said.

"There's a general view that a lot of those older people will stay in Canberra. That, as well, means there will be less of a drain on revenue here."