official services sector purchasing managers indexclimbed to 54.1 in July from 53.9 in June.
The unofficial HSBC China Services Business Activity Index came in at 51.3 in July, unchanged from June.
Any number above 50.0 signals expansion.
And this is a welcome development with many other Chinese economic indicators showing deterioration, which had given some economists concern that China would experience a hard landing.
“China’s service sector has stabilised at a relatively low level of growth,” said HSBC’s Hongbin Qu. “But the profit margin continued to be squeezed given the divergence between input prices and prices charged indices. Without a sustained improvement of demand, services growth is likely to remain lackluster, putting downside pressures to employment growth.”
Combined with the deteriorating manufacturing numbers, the HSBC Composite Output Index slipped to 49.5 from 49.8 in June.