AMID all the gloom lately, Singapore's important services sector posted an unexpectedly healthy 11.6 per cent rise in business receipts in the third quarter.

But economists are not getting too excited about the result, as they believe the sector - which includes financial services, tourism and education - has already peaked and is headed south.

They expect the sector to plunge in the current quarter as the financial and economic crises take a wider economic toll.

DBS economist Irvin Seah said: 'If we look at the growth outlook for services, the knock-on effect of the financial meltdown on this sector has gained traction and it is likely to see a more severe slowdown into the first half of next year.'

Higher receipts were recorded in all the major service sectors, including transport and storage, education, business and real estate and leasing, for the three months to September, the Department of Statistics (DOS) reported.

But business receipts have fallen from 18.8per cent growth in the first quarter compared to last year, to 14.4per cent growth in the second quarter.

Compared to the second quarter, however, services in the third quarter barely grew, clocking a 0.6per cent rise.

Citigroup economist Kit Wei Zheng said: 'The services sector has clearly peaked.'

CIMB-GK economist Song Seng Wun said: 'It may look like things aren't too bad. But we have to be prepared for a much more substantial slowdown from the fourth quarter onwards.'

Read the the full story in Friday's edition of The Straits Times.