Australia's economy is performing slightly better than expected, according to positive local retail trade and capital expenditure data released by the Australian Bureau of Statistics (ABS) on Thursday.

Pedestrians walk past David Jones department store in Melbourne, Australia on Sept. 1, 2011. The latest ABS Retail Trade figures show that Australian retail sales rose 0.5 percent in July. (Xinhua/Bai Xue)
Retail sales rose 0.5 percent in July, beating economists' forecast of 0.3 percent.

More significantly, new private capital expenditure rose 4.9 percent in the June quarter, surpassing median market forecast of 4.0 percent.

Senior economist from Royal Bank of Canada (RBC) Capital Markets, Su-Lin Ong, said both releases were upside surprises.

Ong said the capital expenditure data showed business spending plans were "very much on track" and the retail sales figure was "a reasonable number all round", following on the back of two fairly weak months.

Australia's St George Bank Chief Economist Besa Deda said the capital expenditure result was solid and would continue to be the key growth engine in the economy.

Deda said the July retail sales numbers were stronger-than- expected, although weak retail conditions were likely to continue over coming months.

VietNamNet/Xinhuanet