Germany's private sector grew for the second month in a row in September, boosted by expanding order books, a key survey showed today.
A flash estimate of the Markit composite purchasing managers' index (PMI), which surveys the service and manufacturing sectors, fell to 52.2 from 54.0 in August but remained above the key 50 mark separating contraction from expansion.
The composite PMI's new business sub-index rose to 52.3 from 51.6.
"What was good was that the new orders continued to rise, to the highest level since June 2008," said Markit chief economist Chris Williamson. "That offers some reassurance that we do continue to see expansion in Germany."
The data added to signs that Europe's largest economy is on an upwards path after emerging from recession in the second quarter.
The Bundesbank said on Monday the economy should pick up in the third quarter of this year, with the global rise in activity supporting Germany's key export sector.
The headline services PMI, tracking businesses ranging from banks to bookshops, fell to 52.2 from 53.8 in August but still pointed towards growth. A consensus forecast in a Reuters poll of economists had predicted a slight rise to 54.0.
The service PMI's business expections sub-index held above the key 50 mark for a fifth month running and rose to its highest level since January 2006.
The headline manufacturing PMI nudged closer to the 50 mark, rising to 49.6 in September from 49.2 in August. A sub-index tracking new manufacturing orders rose to 53.7 from 53.4, reaching its highest level in 18 months.
"We have already had manufacturing output and new orders expanding for three months, so that should pull that index above the 50 line next month," Mr Williamson said. "The key to that really will be employment."
The PMI figures chimed with recent German data suggesting that the worst may be over for Germany.
The rise in German gross domestic product in the second quarter brought an end to the country's deepest recession since World War Two and has boosted hopes of recovery in the broader euro zone.
Economists say, however, the recovery in Europe's largest economy is likely to be slow. The ZEW economic think tank's September survey of German analyst and investor sentiment, released last week, rose to a three-year high but fell short of expectations.
"There is a possibility that we are seeing some factors that have helped boost growth beginning to wane, in particular, I am thinking about the car scrappage scheme," Mr Williamson said.
The Finance Ministry said earlier this week it was unclear if the turnaround was on a solid footing.
Reuters