(Yicai) Dec. 6 -- Activity in China’s services sector expanded at the fastest pace in three months in November, as gauges of business activity and new orders rose for the 11th month in a row, according to a widely watched private survey.

The Caixin services purchasing managers' index stood at 51.5 last month, up from 50.4 in October, data released in a report by financial media group Caixin showed today. A reading above 50 indicates expansion.

The reading was better than the official services PMI, which fell to 49.3 from 48.5, according to figures announced earlier by the National Bureau of Statistics. The NBS polls 3,200 businesses, mostly state-owned enterprises, whereas the Caixin-sponsored survey tracks 650 firms that are generally smaller and privately owned.

“Though modest by historical standards, upturns in both activity and overall new work were the best seen for three months amid reports of firmer market conditions,” Caixin’s report noted.

The business activity and new orders sub-indexes edged up to a three-month high, but were still lower than the long-term average. While market fundamentals improved and new orders rose, customers were too few, according to the surveyed companies. At the same time, external demand remained expansive, and the new export orders index logged a modest decline within the expansion range.

The macroeconomy is picking up and market expectations have improved, said Wang Zhe, a senior economist at Caixin Insight Group. But affected by various unfavorable factors, domestic and external demand remain below par and pressure on employment is still relatively high, while the basis for the economic recovery needs further consolidation, he added.

The previously released Caixin manufacturing purchasing managers’ index rose to 50.7 in November, returning to expansion territory, from 49.5 the previous month.

The higher Caixin manufacturing and services PMIs drove the comprehensive up from 50 in October to 51.6 last month, also a three-month high, indicating an improvement in business activity. The official comprehensive PMI slipped to 50.4 from 50.1.

While supply and demand in the service sector both climbed, the employment situation worsened. The jobs index dropped below the threshold last month for the first time since February. Some firms hired more to develop new business, but others reorganized, resulting in lower headcounts, the report said.

The market confidence in the service sector rose slightly, with some firms expecting improvements in the economic environment and client numbers. The business expectations index edged higher from October, its lowest point since April 2020, but stayed below the long-term average.

Editor: Tom Litting