(Yicai) Jan. 4 -- Activity in China’s services sector expanded at the fastest pace in the past five months in December, according to a widely watched private survey.

The Caixin services purchasing managers’ index came in at 52.9 last month, up from 51.5 in November, data released today by financial media group Caixin showed. The figure was 50.4 in October, 50.2 in September, 51.8 in August, and 54.1 in July. A reading above 50 indicates expansion.

The Caixin PMI was better than the official services PMI, which remained unchanged in contraction territory at 49.3 percent, according to figures earlier released by the National Bureau of Statistics.

“The services sector logged diverging price increases in December, with rising costs in raw materials and labor contributing to the fastest growth in input costs over the past five months,” said Wang Zhe, senior economist at Caixin’s think tank. “However, intense market competition restrained service providers from raising fees, resulting in only a marginal increase and the gauge measuring a four-month low.”

The services business activity and new order sub-indexes grew substantially in December, while the services employment sub-index rebounded for the first time in three months.

“Optimism prevailed in the services industry, with enterprises expressing confidence in an improved economic outlook for the coming year,” Wang noted.

The Caixin China General Composite PMI, which combines both manufacturing and services activity, rose to 52.6 in December from 51.6 in November, the best growth recorded since May, Caixin said.

“The annual Central Economic Work Conference in December highlighted ongoing economic recovery and progress in high-quality development,” Wang pointed out. “But it is also crucial to note that domestic and external demand is still insufficient, and the foundation for a positive economic recovery needs to be consolidated.”

Editor: Futura Costaglione