By Ellen Zhang and Ryan Woo

BEIJING, Feb 4 (Reuters) - China's services activity expanded at its quickest pace in three months in January, buoyed by stronger new orders and pushing hiring to its highest since July last year, a private-sector survey showed on Wednesday.

The RatingDog China General Services PMI, compiled by S&P Global, edged up to 52.3 in January from 52.0 the previous month, the highest reading since October. The 50-point mark separates expansion from contraction.

The reading, coupled with the manufacturing survey, points to a tentative improvement for some businesses at the start of the year. However, they contrast with an official survey which showed both factory and services activity losing momentum. Barclays analysts say recent readings suggest the front-loaded measures may be insufficient, or may still need time to translate into improved sentiment and activity.

According to the RatingDog survey, the Composite Output Index, which combines manufacturing and services performance, rose to 51.6, compared with 51.3 in December.

Growth in new orders in the services sector picked up from December. New product launches also lifted export business.

To cope with rising workload, service providers hired more full-time and temporary staff at the start of the year. Although marginal, the increase marked the first rise in headcount since July 2025.

Average input costs increased at a slower pace in January, while output charges fell as some service providers lowered prices to support sales.

Business sentiment remained positive as companies were hopeful that expansion plans and better market conditions would lift growth in sales and activity this year. However, confidence slipped from December and was below the 2025 average, reflecting concerns over the global economic outlook.

Looking ahead to February, Yao Yu, founder of RatingDog, said consumption-oriented services such as culture and tourism, catering, and instant retail may see growth driven by the extended nine-day Spring Festival holiday. Producer services, by contrast, are likely to enter a seasonal lull due to factory closures.

According to data by China's Tujia, an online holiday rental portal, booking of homestays grew 48% week-on-week from January, with February 17-19 being the most popular period.

The Spring Festival holidays, as the new year celebrations are known in China, run from February 15 to 23.

This year's Lunar New Year travel rush, the world's biggest annual human migration, kicked off on Monday and will last for 40 days.

Authorities expect a record 9.5 billion passenger trips to be made during the travel period, surpassing the 9.02 billion trips made last year.

(Reporting by Ellen Zhang and Ryan Woo; Editing by Sam Holmes)

((Ellen.Zhang@thomsonreuters.com;))