THE country’s services sector extended its solid expansion in December, offering some cushion for the slowing economy, a private survey showed Friday.

The Caixin/Markit services purchasing managers’ index (PMI) rose to a six-month high of 53.9 in December, up from 53.8 in the previous month and well above the 50-mark separating growth from contraction.

It had slipped to a 13-month low in October.

New export business rose at the fastest rate in six months as firms stepped up efforts to attract orders from overseas. Total new order growth eased slightly, however, pointing to softening domestic demand.

Continued resilience in the services sector, which accounts for more than half of China’s economy, could partly offset pressure from a manufacturing slowdown, a cooling real estate market and trade frictions with the United States.

But official data suggest consumer demand and confidence have been faltering recently as the economic outlook grows more cloudy.

“As the economy slows, all sectors would be affected including the services sector,” said Zhang Yi, chief economist at Zhonghai Shengrong Capital Management.

Indeed, the business survey showed job creation in the sector eased to only a marginal pace as business confidence remained subdued.

Analysts at Chinese investment bank CICC said in a note that employment pressure will likely be seen on many fronts this year, including in the industrial, construction, and services sectors.

The latest Caixin survey also showed operating expenses rose to a three-month high in December, with firms citing rising raw material prices and higher salary costs. Companies were able to raise their prices to customers only marginally in response, suggesting greater pressure on profit margins.

Caixin’s composite manufacturing and services PMI, also released Friday, rose to 52.2 in December from 51.9 in November.

However, total new orders slowed in December while the employment gauge shrank further into negative territory, implying increasing challenges to stabilizing employment, according to Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for December, released last week, fell to 49.7 from 50.2 in November, marking the first contraction since May 2017.

New orders — an indicator of future activity — fell for the first time in two and a half years, with companies reporting subdued demand despite some price discounting.(SD-Agencies)