The boost brings overall GDP growth for 2013 to 2.8 per cent.
While mining investment declined during the quarter, falling 1.5 per cent, this was offset by the 0.8 per cent increase in household spending and the one per cent rise in dwelling investment.
Gross national expenditure also rose over the quarter by 0.3 per cent, bringing it to 0.9 per cent for the year.
Exports increased by 2.4 per cent from the previous quarter due to increased capacity in the resources sector.
HSBC believes these trends are set to continue in the coming months.
It is doubtful the RBA will cut rates further and expects there to be an increase in rates by the end of the year if growth continues to rebalance.
AMP head of investment strategy and chief economist Shane Oliver said despite the headlines about job layoffs and the end of the mining investment boom, the outlook for the Australian economy is positive.
Mr Oliver said that interest rates are at generational lows, the Australian dollar is down 20 per cent and household wealth is up.
“The combination of rising economic growth and continuing low interest rates should underpin a pick-up in non-resources earnings growth over the year ahead, which in turn should support further gains in the Australian share market,” he said.
