The recovery in China's service-sector activity extended into a fourth consecutive month in August, an industry survey showed Thursday, with companies hiring more people for the first time since January.
The Caixin/Markit services Purchasing Managers' Index slipped to 54.0 from July's 54.1 - dipping for the second month after June's decade high but staying above the 50-mark that separates monthly growth from contraction.
The services sector, which accounts for about 60 percent of the economy and half of urban jobs, had been slower to return to growth initially than large manufacturers, but the recovery has gathered pace in recent months as COVID-19 restrictions on public gatherings lifted.
Companies started to hire more in August after six months of layoffs - indicating some recovery in a labor market that has been hit hard by big falls in demand and epidemic restrictions earlier in the year.
Domestic demand drove new orders, with the Caixin survey showing new export business received by China services companies contracting again in August - albeit at a slower pace.
However, the growth in new orders was the weakest in four months and dropped below the long-term average.
"The ongoing resumption of work and normalization of market demand continued to promote the post-epidemic economic recovery," said Wang Zhe, senior economist at Caixin Insight Group.
Services companies remained optimistic about business prospects as the economy continues to recover from the COVID-19 lockdowns - although a sub-index for confidence in the year dipped from July's multiyear high.
China returned to growth in the second quarter after a deep slump at the start of the year. But unexpected weakness in domestic consumption underscored the need for more policy support to bolster the recovery.
Many analysts expect the country to be the only large economy to show positive annual growth in 2020.
