The growth of China's non-manufacturing sector slowed in January, the China Federation of Logistics and Purchasing (CFLP) said Friday.

The non-manufacturing sector's Purchasing Managers Index (PMI), a key economic indicator, fell to 52.9 percent in January from 56 percent one month earlier, the federation said in a statement on its website.

A PMI reading above 50 percent indicates expansion from the previous month, while below indicates contraction.

"The decline in the index shows that China's non-manufacturing industries expanded at a slower pace last month," Cai Jin, vice chairman of the CFLP, said in the statement.

The non-manufacturing data came after China's manufacturing PMI rose to 50.5 percent in January, the highest level since October, indicating that a slowdown in the world's second-largest economy may be stabilizing.

The country's construction sector was less active in the off-season, which "weighed down the overall growth rate of the index" and countered "the sound development of holiday-related retail sales, catering businesses and transportation," Cai said.

Shops and restaurants across the country pocketed 470 billion yuan (74.4 billion U.S. dollars) in sales volume, up 16.2 percent year-on-year, during the seven-day Spring Festival holiday, according to data from the Ministry of Commerce.

Half of the sub-indices for the non-manufacturing sector fell month-on-month, with the index for new export orders down 0.6 percentage points to 45.8 percent last month, while that for new orders shed 2 percentage points to 48.5 percent.

A gauge measuring business activity in the country's construction sector fell to 38.1 percent in January, marking the fifth consecutive monthly decline.

"This reflects that housing demand for both speculation and investment purposes has been curbed," the statement said.

To contain runaway home prices, the Chinese government has put in place a slew of measures to regulate the sector, including tighter monetary policies, higher down payments, restrictions on second-home purchases and property tax trials, slowing down property-related business activities.

Premier Wen Jiabao reiterated on Tuesday that the government will not relax curbs on the property market in the near future in order to bring prices down to a reasonable level.

The federation's data shows that the sub-index for intermediate input prices rose to 58.6 percent, adding to pressure on the government to control consumer prices. The sub-index for business outlook increased to 63.2 percent.

China's economic expansion has been slowing as the Eurozone debt crisis and weak U.S. growth threaten exports and the government's efforts to curb housing prices and inflation hurt output.

The country's economy expanded by 8.9 percent in the fourth quarter of 2011, slowing from 9.1 percent in the third quarter, 9.5 percent in the second quarter, and 9.7 percent in the first quarter.

The government needs to stabilize the expansion of domestic consumption and raise the growth potential of service-related consumption. It should improve the income distribution system and adopt more proactive fiscal policies including structural tax cuts to boost consumer spending, Cai noted.

The federation's non-manufacturing PMI is based on a survey of about 1,200 companies in 20 industries including transport, real estate, retailing, catering and software.