A rise in output helped German manufacturing activity expand at its fastest pace since May 2008 in December, driving an increase in private sector growth in Europe's largest economy, a survey showed today.
A flash estimate of the Markit composite purchasing managers' index (PMI), which surveys the services and manufacturing sectors, showed growth for the fifth month running with a reading of 54.9, up from 53.6 in November.
A reading of 50 marks the threshold separating growth from contraction. The manufacturing sector PMI reading rose to 53.1 from 52.4 in November, surpassing a consensus forecast for 52.6.
"This suggests the German manufacturing sector is entering the coming year on a very solid and strong footing," said Markit economist Rob Dobson.
He noted, however, that fiscal and monetary policy had supported the recovery in Europe's largest economy this year.
"Saying what will happen coming into 2010 is difficult until you get a clear handle on what the plans are for what they're going to do with regards to maintaining or removing those particular supports," he said.
Finance minister Wolfgang Schaeuble has vowed that Germany will begin consolidating its public finances from 2011. But the government does not plan to present medium-term financial plans until May next year.
Germany pulled out of its deepest post-war recession in the second quarter, though data last week pointed to a stuttering recovery, with industry output falling 1.8 per cent from the previous month in October after a 3.1 per cent rise in September.
The headline services PMI, tracking businesses ranging from banks to bookshops, rose to 53.1 from 51.4 in November, versus a consensus forecast for 51.8.
The service PMI's business expectations index registered 52.6, holding above the key 50 mark for an eight consecutive month, but easing from November's reading of 56.3.
Reuters