A better than expected 1.1 percent growth of the Australian economy was powered by a surge in mining exports and was welcome news for the government as the mining boom in Australia winds down.

Treasurer Joe Hockey said he was also encouraged by a pick-up in other sectors.

Annual growth was a seasonally adjusted 3.5 percent, the Australian Bureau of Statistics said, compared with analyst expectations of 3.1 percent. Markets watchers had expected growth of 0.8 percent in the three months to March the West Australian reported.

Hockey said while it was clear Australia relied heavily on its mining exports, the expansion in other sectors “show that the expected transition away from mining investment and construction toward other drivers of growth is underway.”

He added: “This is an important indicator that the rest of the economy — the non-mining side of the economy — is starting to lift, and that's encouraging.”

The Australian dollar rose by a third of a US cent to 92.92 US cents on the back of the figures, which followed a 0.8 percent expansion in the three months to December.

The mining sector made up 80 percent of growth in January-March as net exports contributed 1.4 percentage points to the final figure.

The mining sector was aided by good weather and a lack of cyclones that are common this time of year in Western Australia, near the resource rich Pilbara region.