Expansion in China's services industry slowed slightly in April, with employment growth slipping to a seven-month low, a private survey showed on Wednesday, adding to an increasingly cloudy outlook for the world's second-largest economy.
The Markit/HSBC services Purchasing Managers' Index (PMI) stood at 51.4 in April from March's 51.9, but holding above the 50 level that separates expansion from contraction.
The survey found that input prices index eased to their weakest in 10 months, and while the new and outstanding business sub-indexes remained stable, the sub-index of business expectations fell to a seven-month low.
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The data showed "that the service sector is still a relatively resilient part of the economy, but it is not expanding at a fast enough pace to offset the manufacturing slowdown," said Qu Hongbin, chief economist for China at HSBC.
"We think that the economy will continue on a modest path of expansion over the next few months."
The expansion, albeit muted, mirrors a similar slow improvement shown in China's official services PMI, released on May 3. That index rose to 54.8 in April from March's 54.5.
Services made up 46.1 percent of gross domestic product in 2013, having overtaken manufacturing as China's biggest employer in 2011. The fall in employment noted in the survey could be a concern as the government has said job creation is its top priority this year.
The official PMIs are weighted more towards bigger and state-owned enterprises and tend to paint a rosier picture than the HSBC/Markit surveys, which focus more on smaller private firms.
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China's growth engine has lost steam in the past year, squeezed by lacklustre demand for exports and the government's push to cut its own investment in a bid to reshape the economy.
Markit/HSBC's manufacturing sector PMI, released on May 5, showed that activity contracted for a fourth consecutive month in April, with the index at 48.1. However the official manufacturing PMI rose to 50.4 from March's 50.3, indicating a slight expansion.
To prove China has the mettle to enact painful reforms, Premier Li Keqiang has repeatedly said policy would not be loosened drastically to counter any short-term dips in activity.
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Economic growth slowed to an 18-month low of 7.4 percent in the first quarter of 2014. Economists in a Reuters poll expect growth of 7.3 percent for 2014, compared with the government's target of about 7.5 percent.
The focus will now shift to a raft of economic data for April, including industrial output, trade, investment and retail sales, which are expected to show a stabilization in the economy.