SYDNEY (Dow Jones)--Australia's services sector recorded a slower pace of growth in August than July, a performance gauge produced by an industry group published Wednesday shows.

The Australian Industry Group-Commonwealth Bank Performance of Services Index fell 4.4 points in August from July to 51.6.

An index reading above 50.0 indicates expansion in the sector while a reading below 50.0 shows contraction.

Commonwealth Bank Chief Economist Michael Blythe said the slower pace of growth in activity in August highlighted the sensitivity of the economy to interest rate rises.

The Reserve Bank of Australia raised its official cash rate target 25 basis points to 6.5% in August.

"The pullback in services sector activity after the August rate rise was somewhat larger than evident after the rate rises in 2003, 2005 and 2006," Blythe said.

"That said, the domestic economy retains a fair degree of momentum at present. That momentum is the best insulation there is against the negatives at work."

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