BEIJING, (Reuters) – Activity in China’s services sector grew in September after a significant COVID-19 epidemic in Jiangsu’s eastern province receded. A private sector survey on Friday showed some support for a slowing economy.

Caixin/Markit Services Purchasing Managers’ Index (PMI), rose to 53.4 in August from 46.7. This is a significant improvement from last year’s lowest point. On a monthly basis, the 50-point threshold separates contraction from growth.

These better results, which are more focused on small firms located in coastal areas, align with the findings of an official survey that was conducted last week. It also revealed activity growth in the service industry.

Analysts claim that services, which took longer to recover than manufacturing from the pandemic, are more susceptible to COVID-19 outbreaks. This could affect the forecast for the expected rebound in consumption in months to follow.

Wang Zhe (senior economist, Caixin Insight) stated that “in view of this,” the government should concentrate on improving the prevention and control of epidemics and reducing supply-side stress in the coming months.

“It must also balance between multiple objectives such as encouraging employment, stabilizing raw materials prices, maintaining a stable supply of raw materials, and meeting goals for energy consumption control.”

The sub-indices of new business and prices charged rebounded to expansionary territory by September. However, new export business contracted again due to an overseas pandemic that has risen to its lowest level in seven months.

The survey revealed that input prices rose for the 15th consecutive month in September. This was due to rising freight, labour and raw material costs. It is this issue which drove factories into contraction last month.

Caixin’s composite PMI for September, which includes both services and manufacturing, rose to 51.4 in September, from 47.2 last month. It was buoyed in part by strong performance in the services industry.