Australian consumer spending strengthened in the second quarter, building on recent positive results and regaining momentum, said Westpac on Thursday.

The Westpac-DataX Consumer Panel indicated the rise in spending did not come at the cost of savings. In fact, saving balances "were seen rising more strongly" than in first quarter across the country, a trend particularly apparent among young consumers.

Average saving balances remain above their past highs - although not when adjusted for inflation.

The bank said higher income bolstered the increase in both spending and savings. However, a tick up in personal credit use suggests some consumers may be relying on debt for discretionary purchases.