BEIJING - Activity in China's service sector expanded again in April, though the gains were slightly less robust than in March, a private survey showed on Thursday, as firms resumed adding staff after a rare decline the previous month.
The Caixin/Markit services purchasing managers' index (PMI) for April dropped to 51.8 from 52.2 in March, as new business increased at the fastest pace since January while business expectations remained unchanged.
Readings above 50 indicate an expansion on a monthly basis, while readings below signal contraction.
The employment sub-component rose to 50.9 in April from March's 48.9, reversing the first decline in staffing since August 2013.
The solid new business reading was boosted by stronger underlying client demand and new products, the survey said, while companies were also able to pass along higher input prices.
"Expansion in the services sector helped offset some of the impact caused by flagging manufacturing. Overall, however, the economy still faces relatively strong downward pressure," He Fan, chief economist of Caixin, said in a note.
"The government needs to keep implementing moderate stimulus to prevent a hard landing of the economy."
Caixin's composite manufacturing and services PMI number dropped in April after a return to growth in March, with the headline figure falling to 50.8 in April from 51.3 in March. Still, the April reading was the second highest since May 2015.
The composite employment figure rose to 48.3 in April from 47.6 in March, but it still marked the 11th straight month of contraction in employment.
China's official services survey released May 1 showed activity in the industry remained strong in April but grew at a slightly slower pace, with the official reading at 53.5, compared with 53.8 in March.
China's official factory survey and Caixin's private survey for April gave mixed signals on the health of the manufacturing sector.
The official survey showed activity expanded for the second month in a row in April but only marginally, lagging expectations, while the Caixin manufacturing PMI was in negative territory for the 14th month in a row.