The HSBC China purchasing managers index (PMI) for the service sector has posted its fastest growth in four months, rising to 53.9 in February on improving new businesses, a HSBC report said Monday.
The seasonally adjusted index was 1.4 points higher than the data registered in January.
A reading above 50 indicates expansion while below suggests contraction.
The report attributed the growth to an increase in new orders.
The index for new business orders in the service sector came in at an eight-month high in February, a sign that market demand is picking up, it said.
But the figure was still below the long-term average, according to the report.
The business outlook index showed optimism in the sector, with 32 percent of those surveyed forecasting increasing business activities in the coming 12 months on expectations of improving demand and new product development, said the report.
Average input cost in the service industry continued to rise as the index ran above the 50-demarcation line for 28 consecutive months, which the report said was a result of climbing fuel and labor prices.
The HSBC's seasonally adjusted data jarred with the official figure, which factored in the impact of the holiday period.
The China Federation of Logistics and Purchasing said Saturday the PMI for the non-manufacturing sector fell to 48.4 percent from 52.9 percent in January because of waning market demand after the Spring Festival.