A private gauge of activity in China's services sector rose to a four-month high in December, in contrast with an official index that remained in contraction.

The Caixin services purchasing managers index climbed to 52.9 in December from 51.5 in November, Caixin Media Co. and S&P Global said Thursday. A reading above the 50 mark suggests activity expansion, while a reading below that level indicates contraction.

Overall new business expanded at the fastest pace since May, with a number of companies reporting higher customer numbers and spending, according to Caixin. Improved demand led companies to increase staffing levels in December, marking the first growth in service-sector employment in three months.

"Optimism prevailed in the services industry, with enterprises expressing confidence in an improved economic outlook for the coming year," said Wang Zhe, a senior economist at Caixin Insight Group. "This sentiment was reflected in the gauge for businesses' expectations about future activity, which came in at around the historical mean from 2012 to 2022, albeit about three points below the average for the first 11 months of 2023." he added.

Meanwhile, a competing official gauge, which tracks larger and state-owned companies more closely, painted a more gloomy picture for China's services sector.

China's official nonmanufacturing PMI, which covers both services and construction activity, rose to 50.4 in December, compared with 50.2 in November. The subindex tracking service activity remained at 49.3 in December, unchanged from the prior month, while the construction subindex climbed to 56.9 from 55.0.


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01-03-24 2134ET