Mubasher: Chinese services sector grew at the slowest pace in seven months during September, despite the inflows of new business orders, a private survey of the sector showed.

The Caixin purchasing managers’ index (PMI), which gives a snapshot of business conditions China’s services sector, dropped to 51.3 last September, 52.1 in August, Caixin Media and research firm IHS Markit said on Tuesday.

Nevertheless, the Caixin composite output index, which tracks the activity in both of factories and services businesses, edged up to 51.9 last month, from 51.6 in the prior month.

Total new business rose in September at the fastest pace since January last year, led by new goods and stronger customer demand.

New export orders, however, increased at slower pace month-on-month, according to the survey.

Hiring at services companies surged to a level that was not seen since January 2017, while some businesses pointed out that they were expanding their workforce due to rising sales.

“China’s economy showed signs of marginal recovery in September, as the labour market improved and domestic demand increased at a faster pace,” CEBM Group macroeconomic analysis director Zhong Zhengsheng said.

Meanwhile, business expectations in the services sector fell, which was attributed by Zhong to fluctuations in foreign exchange rates as well as surging costs of labour and raw materials.

By 7:20 am GMT, the Chinese yuan (CNY) strengthened against the US dollar, with the USD/CNY pair falling by 0.37% to CNY 7.1219.