January marked the significant growth of Australia's service industries, pushing up by 2.9 to 51.9 points in the month, according to the new survey jointly conducted by the Australian Industry Group (AIG) and Commonwealth Bank of Australia (CBA).

Released on Friday, the AIG-CBA overall performance of services index (PSI) showed that the hospitality, finance & insurance, personal & recreational services sub-sectors all recorded growth in the past month.

Economists welcomed the new figures as indicators of sustained expansion in the coming months, with the likelihood that new orders will add up to the gains and the country's employment rate will be further boosted.

Recoveries seen in the retail sector further generated an overall upbeat mood that experts said can be attributed to the upswing of spending usually seen in the holiday month of December, effects of which have spilled over to the month after.

Analysts also credited the Reserve Bank of Australia's (RBA) decision on November and December to impose rate cuts, specifically to stave off the impact of the Euro crisis and to encourage more shopping activities.

The RBA move, according to CBA senior economist John Peters, also eased down the pressure of the high Australian dollar that many sectors blamed for their lingering woes.

"The rate cuts have probably had some positive spinoff for segments of the services struggling against the substantial negative headwinds of the robust Australian dollar, diffident and frugal consumers, and weak business confidence," Peters told Reuters.

The latest PSI also showed that new orders jumped 3.7 to 54.1 last month while employment rose 3.1 to 51.2 points in the month, indicating too that the gains were wholly sustainable through the months ahead, analysts said.

Inflation levels appears to be on check too as median selling prices settled down by two full points to 46.9 while national wages levelled down by 2.6 to 57.8 points, the index revealed.

With the official GDP signalling that Australian households were raising their expenditures in the last quarter of 2011, it is likely for service activities to gain further traction in the periods ahead, analysts said.

That scenario, they added, supports the underlying strength of the general economy.

And those encouraging indicators will snowball into bigger benefits in the event that the RBA will slash another 25 percentage points from the current cash rate once the board meets next week, Peters said.

"That would help further 'fireproof' the local economy from any potential negative fallout from Euroland's chronic fiscal and debt woes," the CBA analyst added.