(Yicai Global) Feb. 3 -- China’s service sector activity bounced back in January, ending a four-month contraction, after Covid-19 controls were eased and infections peaked, according to a widely watched private survey.

The Caixin purchasing managers’ index for services jumped to 52.9 last month from 48 in December, moving into growth for the first time since last August, data released by financial media group Caixin showed today. A level above 50 indicates expansion.

The official services PMI, released by the National Bureau of Statistics on Jan. 31, rose to 54.4 from 41.6 in the same period, expanding after a three-month shrinkage and showing the strongest growth since last June.

The service sector is rebounding faster than manufacturing, said Wang Zhe, Caixin Insight Group’s senior economist. But looking ahead, there are still strong uncertainties about the pandemic, so businesses should prepare for a possible next wave, he added.

Confidence continued to pick up, with the business activity expectations index hitting the highest level since March 2011. Firms generally believe that the market and customer demand will rebound strongly along with the economic upturn.

The production and operation and new order indexes swung back into expansion territory for the first time in five months in January, according to Caixin. New export orders soared to the highest since April 2021.

The jobs market tightened further in the month, with the services employment index below 50 for the third consecutive month, though it fell at a slower pace. Some companies shed staff to save on costs, while some employees were unable to return to work because of the epidemic.

A recovery in the jobs situation will take more time, said Wang.

Despite the Caixin manufacturing PMI rising only 0.2 point to 49.2 in January, the jump in the Caixin services PMI pushed the Caixin China general PMI back into expansion for the first time in five months. It jumped to 51.1 from 48.3 in December.

The Caixin China general PMI also rebounded at a slower pace than the official comprehensive PMI output index, which soared to 52.9 from 42.6 in December.

Editor: Futura Costaglione