China’s service sector continued to expand in April but the pace of growth moderated slightly, survey results from S&P Global showed on Monday.

The Caixin services Purchasing Managers’ Index fell to 52.5 in April from 52.7 in the previous month. A reading above 50.0 indicates expansion in the sector.

The official PMI survey results also showed that the private sector growth moderated in April. The manufacturing PMI declined to 50.4 in April from 50.8 in March. The non-manufacturing PMI slid to 51.2 from 53.0 in March.

Despite the slowdown, the service sector expanded for 16 consecutive months, S&P Global said. The latest growth was driven by another strong growth in new business. The pace of increase in new work was the fastest since May 2023.

Foreign demand also increased in April at the fastest pace in ten months as better external market conditions and rising tourism activity supported the uptick.

On the other hand, work outstanding was little changed and this has led to job cutting. Job shedding reflected a mixture of resignations and redundancies.

Further, business confidence among service providers rose to the highest since last December. There are hopes that market conditions can improve in the year ahead.

Average input costs continued to rise in the service sector in April. Input price inflation was slightly higher on input material, labor and energy costs. At the same time, output price inflation increased as firms sought to share rising cost burdens with clients.

The survey showed that the overall private sector activity expanded the most since last May. The services sector outperformed its manufacturing counterpart in April. The composite output index posted 52.8 in April, up from 52.7 in March.