Companies hired additional staff for the first time since last July in response to rising new work inflows. Meanwhile, cost pressures eased, while output charges were little-changed from the previous month. Despite the improvement in demand conditions and slower cost inflation, business confidence softened at the start of the first quarter.

The headline RatingDog China General Services Business Activity Index posted above the 50.0 neutral mark in January to indicate another expansion of services activity China, thereby extending the current period of growth to just over three years. At 52.3, up from 52.0 in December, the latest rise in services activity was the strongest in three months.

Central to the latest acceleration in services activity growth was a stronger rise in new business. The rate of new order growth quickened for the first time in three months, and was often linked to successful promotional activities and greater client interest.

The Composite Output Index posted above the 50.0 no-change threshold at 51.6 in January, up from 51.3 in December, to indicate a further increase in overall business activity across China at the start of the year. The acceleration in output growth was broad based across both the manufacturing and service sectors.

Total new business also rose at a faster pace, supported by a fresh increase in new export business. Higher new work inflows led to a renewed rise in staffing levels, which in turn helped companies to work through their outstanding business.

Composite output charges rose for the first time in 14 months as input prices continued to increase, though the rate of cost inflation eased since December.

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