Photo taken on May 29, 2025 shows a factory for producing electric vehicles in Ningbo, East China's Zhejiang Province. Photo: VCG

China's service sector activity accelerates to hit a 15-month high in August, mainly thanks to a more stable domestic market and a recovery in foreign demand, according to a private survey released on Wednesday.

The RatingDog China services purchasing managers' index (PMI), compiled by S&P Global, rose to 53.0 in August, up from 52.6 in July, marking the highest reading seen since May 2024, according to data published on the company's website.

A PMI reading above 50 indicates expansion, while a reading below 50 suggests contraction.

The result is largely consistent with recent data released by China's National Bureau of Statistics, which showed that the services PMI stood at 50.5 in August, up from 50 in July.

The upturn was supported by a quicker increase in overall new orders and a stronger rise in exports. The rate of new order growth accelerated for a second successive month, and was the steepest seen since May 2024, according to RatingDog.

This was partly supported by a stronger rise in new exports, which increased at the fastest rate since February. Comments from panelists often mentioned successful business development efforts, improvements in market conditions and increased tourism as key drivers of sales growth, it said.

"On the positive side, the index measuring overall new business saw a significant jump to its highest point since May of last year, while new exports expanded at the quickest pace since February. This was largely driven by more stable domestic market demand and a recovery in foreign demand. At the same time, the businesses in the service sector remain optimistic about the future, with overall confidence remaining high since March," Yao Yu, founder at RatingDog was quoted as saying.

Business sentiment regarding the one-year outlook has remained positive across the service sector in August, with the level of confidence unchanged from July. Companies often hoped that better market conditions and internal growth plans would stimulate business activity growth in the year ahead, according to the survey.