Australia's services sector has grown for a third consecutive month, and at its fastest rate in more than seven years, thanks to the housing boom, low interest rates and the plummeting currency.
The Australian Industry Group's Performance of Services Index (PSI) climbed 1.5 points to 55.6 in August, its fastest pace since March 2008.
A reading above 50 indicates the sector is expanding.
Ai Group chief executive Innes Willox said the result defied the slow economic growth figures released on Wednesday.
Australia's economy grew by a weaker-than-expected 0.2 per cent in the June quarter, its slowest pace in more than two years.
"This suggests that the economy has strengthened somewhat over the past couple of months and that we are gradually finding sources of growth to balance the further fall in mining-related investment," he said.
PSI respondents said trading conditions had improved due to a combination of the booming property market, record-low interest rates and the falling Australian dollar.
Small-business tax write-offs announced in the government's May budget were also helping, the report showed.
But weak business investment, shaky business and consumer confidence, and sluggish household income growth was still weighing on the sector.
Three of the five activity sub-indexes expanded, with new orders and sales up for a third straight month, while employment rose for a second month.
Mr Willox said the solid gains posted by new orders for businesses, which increased by 3.9 points to 56.9 points, suggest the services sector would continue to grow in the months ahead.
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