The services sector of New Zealand's economy became more positive about its performance last month, even as storms battering the world economy grew more intense.

The Bank of New Zealand-Business NZ performance of services index (PSI), published today, stood at 55.6 last month, 3.7 points higher than the January result which was the lowest recorded for the survey since it started last April.

A PSI reading above 50 indicates that the services sector is generally expanding; below 50 indicates a decline.

BNZ head of research Stephen Toplis said the result was intriguing.

The bank was increasingly of the view the New Zealand economy was headed for a mild recession, which the services sector would bear the brunt of, he said.

Yet the PSI would tend to suggest that either the bank was wrong, the softening being anticipated had not hit home yet, or businesses were in denial.

Probably a combination of those factors was at work, Mr Toplis said.

"Nevertheless, we still contend that the services sector is in for a difficult 2008 and that while levels of activity may be sustained on average across the economy, bits of this sector will come under substantial duress."

Heading the list of sectors under pressure was likely to be anyone involved either directly, or indirectly, with the residential property sector.

Retail sales would also remain constrained, while problems for the hospitality industry would be exacerbated by relatively weak tourism inflows.

But parts of the services sector would be insulated by ongoing growth in the civil service, the election campaign, the need for heightened advice in difficult times and the industry proliferation around KiwiSaver.

Among the five diffusion indexes that made up the PSI, new orders and business was highest at 61.4, while stocks and inventories returned to positive activity after the Christmas and holiday sales period at 51.3.

Activity and sales was up from last month's flat reading to 56.2.

Most service sub-sectors showed consistent expansion for the second month of 2008, with seven falling within a fairly narrow band of activity.

Retail trade (56.6) took the top spot for activity, followed by health and community services (55.7). The lowest result was for accommodation, cafes & restaurants (53.4), after leading the sectors in January.