http://nz.biz.yahoo.com//080505/18/593z.html

There has been a sharp fall in activity in the services sector which accounts for about two-thirds of Australia's overall economy.

The Australian Industry Group-Commonwealth Bank Performance of Services Index (ASX: PSI.ax) is down 7.6 points to 47.3.

That is below the key level of 50, indicating a contraction in services in April.

Commonwealth Bank chief economist Michael Blythe says the lacklustre result can be attributed to more than the recent interest rate rises.

"There is a number of deadweights on the Australian economy at the moment," he said.

"Higher petrol prices of course is another one and certainly the volatility and negative sentiment generated by concerns about the global outlook and on financial markets is something I think that's probably also weighing on these sort of sentiment type measures."