Australia's gross domestic product expanded a seasonally adjusted 3.1 percent on year in the first quarter of 2016, the Australian Bureau of Statistics said on Wednesday.
That beat forecasts for an increase of 2.8 percent following the 3.0 percent gain in the previous three months.
On a quarterly basis, GDP grew 1.1 percent - also beating expectations for 0.8 percent and up from 0.6 percent in the three months prior.
The terms of trade fell 1.9 percent on quarter and 11.5 percent on year, reflecting a fall in the price of exports relative to the price of imports.
The major driver of economic growth in Q1 came from exports, which contributed 1.0 percentage point, and household final consumption expenditure contributing 0.4 percentage points.
The increase in exports is reflected in the growth observed in mining production (6.2 percent). Growth was also observed in the service industries of financial and insurance services (1.8 percent), accommodation and food services (1.5 percent), and arts and recreation services (0.9 percent).
The largest detractor from growth was private gross fixed capital formation, which fell 2.2 percent. This was driven by falls in new engineering construction (-6.4 percent) and new buildings (-6.9 percent).
Also on Wednesday, the Australian Industry Group said that the manufacturing sector in Australia continued to expand in May, albeit at a slower pace, with a Performance of Manufacturing Index score of 51.0.
That's down from 53.4 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.
May was the 11th consecutive month of expansion, marking the longest streak since 2006.
Among the individual components, stocks, sales, deliveries, new orders, exports and production all continued to expand, while employment fell deeper into contraction.
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