The Caixin China General Services Purchasing Managers' Index (PMI) rose to 57.8 in March from 55.0 in February, marking the third consecutive monthly expansion and highest reading since November 2020. The consumption-led recovery was supported by robust new orders and job creation.
The 50-point mark on the PMI separates expansion and contraction in activity on a monthly basis.
The upbeat figure echoed the official PMI released by the National Bureau of Statistics last week, which shot to the highest level in more than a decade.
Improvements in customer demand led to the sharpest growth of total new work since November 2020, the Caixin survey showed. Notably, new export orders in the services sector grew at the fastest pace recorded by Caixin since 2014.
As firms took on additional workers to satisfy growing business demand, the rate of job creation was the highest in 28 months.
However, backlogs of work rose again even with the influx of new workers. Rising labor and raw material costs have also pushed up input prices at the end of the first quarter.