The Australian Bureau of Statistics said on Wednesday that the economy grew 1.3 per cent in the January to March quarter compared to the previous quarter, which was double what economists had expected.
A major driver was a 19.7 per
cent surge in engineering construction, mainly in mining. Planned investment in
the resources sector reached A$500 billion (S$627 billion).
Increased household spending also made a significant contribution to growth. But manufacturing continued to contract as the mining boom drives up the Australian dollar, making the country's manufactured exports less competitive.
In the period, the economy grew by 1.3% over the previous quarter. Analysts had forecast growth of 0.5%.
Compared with the same period last year, the economy grew by 4.3%.
Treasurer Wayne Swan said the strong growth was achieved despite a cyclone disrupting iron ore exports from Western Australia and some sectors outside the mining industry struggling against a high Australian dollar.
Mineral-rich Western Australia's economy grew by 13.6% for the year.
Swan said the growth also demonstrated that the $1.5 trillion Australian economy would withstand a carbon tax which will be paid by the nation's biggest industrial polluters beginning from next month.
The government's critics argue that the $23 tax that polluters will have to pay for every metric ton of carbon gases that they produce would cost jobs. "The fact is with a carbon price, our economy will continue to grow," Swan said./.
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