Australia's services industry finished 2013 on a sour note, with the sector contracting at a faster rate in December.
According to the Australia Industry Group Performance of Services Index (PSI), employment, new orders and sales all contracted during the month.
The retail sector also continued to decline, despite receiving a boost from Christmas sales.
Ai Group chief executive Innes Willox said the sector had shown signs of improvement since the federal election, but the latest figures showed the industry remained weak.
"Continuing weakness in the important services sector underlines the fragility of the domestic economy at a time when a lift in non-mining related activity is needed to meet the challenge of rebalancing in the wake of the mining investment boom," he said.
He added that the Reserve Bank of Australia may need to consider cutting interest rates further if the sector does not begin to recovery in the next few months.
The PSI declined 2.8 points to 46.1 in December.
A reading of less than 50 indicates a contraction in the sector, and the lower the reading below that number, the greater the rate of decline.
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