While Chinese manufacturing may be stalled, the services sector of the economy surged in July.

The Caixin China Service Purchasing Managers’ Index jumped 2 points month-over-month to hit 53.8 points – the highest figure in 11 months. A PMI reading above 50 signifies growth. This marks the sector’s 12th consecutive month of expansion. The new orders category showed the second-fastest growth in eight months.

The government’s service sector PMI category was 52.8 points, up 0.5 points from the previous month.

According to Caixin, the employment sub-index improved month over month as service providers continued to add workers. Data provider Markit said companies hired more workers because they were expecting business to pick up.

In contrast, the Caixin China Composite PMI, which covers both manufacturing and services, slipped 0.4 points from June to 50.2, reflecting the weakest expansion of the country’s business activities in 14 months.

Manufacturing continued to struggle, with the Caixin China Manufacturing PMI hitting a 15-month low of 47.8 points in July. This compared with the official PMI report, which showed manufacturing growth unexpectedly stalled.

The official surveys focus on large, state-owned firms, while the private ones measure activity across small to medium-sized firms, which are facing tougher financial and operating conditions, said Reuters.

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