Business New Zealand is expecting activity in the services sector to remain robust, though there are question marks over the sustainability of the surging housing market in Auckland.
The BNZ-Business New Zealand Performances of Services Index declined 0.1 points to 55.4 last month, but it was still the the highest March recorded in three years, underpinned by strong demand for property in the country's biggest city.
A reading above 50 indicates the sector is expanding.
Business New Zealand chief executive Phil O'Reilly said the rebuilding of Christchurch and Auckland's surging property market had underpinned activity.
He said the northern region received a reading of 57.2 on a regional basis for March, because companies were continuing to export despite the high dollar and there had been strong growth, particularly in Auckland's housing market.
Mr O'Reilly said the overall growth numbers were sustainable but the question was over the services sector's exposure to the housing market and whether that turned into a bubble and then dropped again.
He said all the indexes in the overall index were looking reasonably positive, including employment.
The composite index, which measures activity in the manufacturing and services sectors, eased slightly, but BNZ said the last three months had shown a level of consistent expansion not seen since early 2010.
