Business activity in China's service sector accelerated slightly in August, a private survey showed Monday.
The Caixin China General Services PMI (Purchasing Managers' Index) came in at 52.1 in August, up from 51.7 in July, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media Co. Ltd.
A reading above 50 indicates expansion, while a reading below 50 represents contraction.
The surveyed companies partly linked higher business activity to new projects.
The sector's staff numbers stabilized in August after a marginal reduction in July, as some service providers hired additional employees to help with new projects, the survey showed.
Compared with the previous six months, service companies were more optimistic about their business outlook for the next 12 months, citing expectations of improving market conditions and new business development.
The Caixin China General Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 service companies.
The Caixin General China Manufacturing PMI, an indicator of factory activity, dropped to 50 in August from 50.6 in July, according to data released last week.
"Overall, the economy continued to expand in August at a pace similar to July, but conditions in the manufacturing and service sectors diverged again," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group.
Downward pressure on China's economy remains and supportive policies must continue, Zhong said.
China is counting on growth in services to offset weakness in manufacturing and exports.
The country's economy expanded 6.7 percent in the second quarter, still within the government's target range of 6.5-7 percent for 2016.
