BEIJING (Reuters) - China’s services sector activity grew at its slowest pace in 10 months in February as firms struggled with sluggish demand and high costs, a private sector survey showed on Wednesday, prompting them to cut jobs. The Caixin/Markit services Purchasing Managers’ Index (PMI) fell to 51.5, the lowest since April, from 52.0 in January but remained above the 50-mark that separates growth from contraction on a monthly basis. A sub-index for employment stood at 47.9, slipping into contraction after six months of growth, as businesses laid off workers, the survey showed. New export business also shrank after expanding for three months. The loss of momentum came as China faced coronavirus flare-ups at the start of the year, while overseas demand continued to be hit by the COVID-19 pandemic. The findings were largely in line with an official survey released on Sunday. “The momentum of post-epidemic services recovery further weakened,” said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the data release. “Service providers cut staff to reduce costs as weakened market sentiment had a knock-on effect on the job market.” The services sector, which had been slower to recover initially from the pandemic than the industrial sector, is more vulnerable to social distancing restrictions. Domestic COVID-19 cases have however been stamped out in China since early February and analysts expect a strong rebound in full-year growth. February also saw the Lunar New Year holidays, when many workers return to their hometowns, although this year saw far fewer trips amid coronavirus fears. Costs for services firms continued to grow quickly, although at a slower pace than the month before. But Chinese services firms remained optimistic about the year ahead, with business expectations over the next 12 months rising from January. Caixin’s composite manufacturing and services PMI, also released on Wednesday, slipped to 51.7 in February, from 52.2 the previous month.