The finance and insurance industries were the star performers of the Australian services sector last month, according to the latest Australian Industry Group/Commonwealth Bank Australian Performance of Services Index.

Finance and insurance was the strongest sector overall – the sector’s fourth consecutive expansion in activity, with finance and insurance also growing in the December 2011 survey and January and February surveys this year.

The finance and insurance sub-sector reported solid growth in new orders. But overall, weak trading conditions kept the services sector in the red, with personal and recreational services the only other of the nine sub-sectors to post an expansion in activity.

March marked the second consecutive month of contraction in the Australian service sector with accommodation, cafes and restaurants the worst-performing sub-sector, followed by transport and storage, and property and business services, and manufacturing and construction.

“The further slowing of the services sector in March and the associated fall in selling prices, employment and new orders reinforces the picture of a national economy in which large sectors have no or only very little momentum,” Australian Industry Group CEO-designate Innes Willox said.