The Australian economy's better- than-expected growth rate in the March quarter is unlikely to prevent a pick up in the jobless rate, economists say.
Australia's economy grew by 0.9 per cent in the March quarter and by 2.3 per cent over 12 months to March, official figures released Wednesday show.
That was better than the 0.5 per cent quarterly rise, and 1.9 per cent annual rate, economists surveyed by AAP predicted last week.
The rise was largely driven by a pick up in exports, stockpiling by firms, household spending and home building.
The Australian dollar surged after the news, jumping past the 78 US cent mark.
While the quarterly figures were stronger than expected, Australia's annual economic growth rate remains weak, AMP Capital Investors chief economist Shane Oliver said.
At 2.3 per cent, it remains below the decade-average growth rate of 2.8 per cent, and even further below the 15-year average of 3.0 per cent.
"The underlying picture is still one of softness in the economy," Dr Oliver said
"We were rescued in the quarter by good export volumes and a pick up in stockpiling," Dr Oliver said.
"We can't rely on either of those continuing at those rates."
Key contributors to growth in the first three months of the year were rises in net exports, business inventories, household consumption and dwelling investment.
On the downside, commercial construction, business equipment and public investment all slipped.
Dr Oliver predicted the current annual rate of growth would not be enough to stop a rise in the unemployment rate, which rose to 6.2 per cent in April.
"It doesn't augur that well for employment growth," Dr Oliver said.
"It's consistent with the unemployment rate drifting higher."
The Reserve Bank expects unemployment will peak at about 6.5 per cent in mid 2016.
UBS economist Scott Haslem said the GDP data indicated that the unemployment rate would likely move higher, if non-mining business investment failed to rebound.
"We continue to expect 2015 growth to be below consensus, and unemployment to edge higher to 6.5 per cent," Mr Haslem said.
St George economists fear the strong growth figures for the start of 2015 will be sustained for the rest of the year, with mining investment expected to fall more significantly.
"The outlook continues to be for below trend growth for 2015," senior economists Janu Chan and Jo Horton said.
Meanwhile, Commonwealth Bank economist Michael Workman said there was nothing in the GDP data to prompt the Reserve Bank to move on rates any time soon, having slashed the cash rate to record low two per cent in May.
"But at a time of below-trend growth, low inflation outcomes and spare capacity in the labour market, the risks lie with another RBA rate cut."
DRIVERS BEHIND THE SURPRISING JUMP IN GDP
* Net exports, up 0.5 pct
* Inventories, up 0.3 pct
* Household consumption, up 0.3 pct
* Dwelling investment, up 0.2 pct
* Commercial construction, down 0.4 pct
* Business equipment, down 1.0pct
* Public investment, down 0.1 pct
(Source: ABS)
