Services sector starts 2015 on front foot

After a year of decline, Australia's services sector is on the cusp of expansion, with Tuesday's rate cut expected to provide even more of a boost.

Australia's services sector is off to a positive start in 2015, providing a glimmer of hope after a year of decline.

The sector grew 2.4 points in January to 49.9, which is just below the 50 level that separates expansion from contraction, according to the Australian Industry Group performance of services index on Wednesday.

Ai Group chief executive Innes Willox said Tuesday's rate cut from the Reserve Bank would lift the spirits of service sector businesses, amid concerns about weak economic conditions and subdued confidence.