Australia's gross domestic product added a seasonally adjusted 2.8 percent on year in the fourth quarter of 2013, the Australian Bureau of Statistics said on Wednesday.
That beat forecasts for an increase of 2.5 percent following the 2.3 percent gain in the third quarter.
On a quarterly basis, GDP added 0.8 percent - also topping expectations for an increase of 0.7 percent following the 0.6 percent gain in the previous three months.
Final consumption expenditure was up 0.7 percent on quarter and 2.6 percent on year.
Gross fixed capital formation fell 1.2 percent on quarter and 2.4 percent on year.
Terms of trade added 0.6 percent on quarter but dropped 1.2 percent on year.
Real net disposable income was up 0.7 percent on quarter and 1.8 percent on year. Real gross domestic income added 0.9 percent.
The contributors to expenditure on GDP were net exports (0.6 percentage points), final consumption expenditure (0.5 percentage points), public gross fixed capital formation (0.2 percentage points) and changes in inventories (0.2 percentage points).
The main detractor was private gross fixed capital formation (-0.5 percentage points).
The main contributors to GDP were mining (up 1.2 percent), rental, hiring and real estate services (up 4.2 percent) and manufacturing (up 1.5 percent). These industries each contributed 0.1 percentage points to the increase in GDP.
Also on Wednesday, the Australian Industry Group said that its index measuring the service sector in Australia came in with a score of 55.2 in February. That's up sharply from the January reading of 49.3, and it also represents an almost six-year high.
It's also the first time in two years that the sector has seen expansion - a score above 50 is positive, while a reading below 50 means contraction.
Among the individual components of the survey, health and community services climbed to 67.7 and finance and insurance jumped to 67.0.
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