GROWTH in China’s services sector activity picked up to a three-month high in November, buoyed by a solid rise in new business, though the rate of expansion remained moderate and weaker than the long-run trend, a private survey showed yesterday.

The upbeat findings broadly echo those of an official gauge of the non-manufacturing sector last week that showed activity accelerated at a faster rate in November, reinforcing the view that an expected slowdown in the broader economy would be gradual.

The Caixin/Markit services purchasing managers’ index (PMI) rose to 51.9 in November, up from 51.2 in October and the highest reading since August.

A reading above 50 indicates growth, and any lower signals contraction on a monthly basis.

The index had plunged to 21-month low in September after hitting a three-month high in August.

New business also grew at the fastest pace in three months, with survey respondents reporting sales were supported by the addition of new clients and promotional activities. Companies slightly picked up the pace of new hiring as a result.

China is counting on growth in services and consumption to rebalance the economic growth model from its heavy reliance on investment and exports.

The services sector accounts for over half of the economy, with rising wages giving consumers more spending power that is being felt at home and abroad.

Sales during China’s annual 24-hour shopping binge Nov. 11, known as Singles Day, exceeded combined sales for Black Friday and Cyber Monday in the United States.

Alibaba, the Chinese e-commerce giant, reported its Singles Day sales hit US$25.4 billion, smashing its own record from last year and cementing it as the world’s biggest shopping event.

The Caixin survey showed service providers in China were able to pass through higher input costs to clients, as companies raised their output charges at the quickest pace since July 2015.

A number of surveyed firms indicated that greater prices paid for raw materials, fuel and salaries had driven the latest upturn in overall costs.

“The Caixin PMI readings in November showed the economy has maintained stability and there was no imminent risk of a significant decline in its growth rate,” Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said in a note with the report.(SD-Agencies)