Australian economy beats expectations with 3.1pc annual GDP growth

The Australian economy has beaten expectations, with very strong 1 per cent growth in the first quarter driving a 3.1 per cent annual increase in GDP.

The Australian Bureau of Statistics data show commodities exports were the key driver of growth in the March quarter.

"Growth in exports accounted for half the growth in GDP, and reflected strength in exports of mining commodities," said the bureau's chief economist Bruce Hockman.

The mining sector's output grew 2.9 per cent, thanks to increases in coal, iron ore and LNG production.

This fed through to the strongest increase in corporate profits over the past year, up 6 per cent in the March quarter.

"The rise in profits was consistent with the strong increase in mining exports coupled with a lift in the terms of trade this quarter," Mr Hockman observed.

The rise in corporate profits has also prompted businesses to their investment in machinery and equipment, including outside the resources sector.

More to come.

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