BERLIN: Germany's private sector expanded at its fastest rate in more than 1-1/2 years in January, a survey showed on Tuesday, suggesting Europe's largest economy is on the road to recovery after shrinking in the fourth quarter of 2012.
Markit's composite Purchasing Managers' Index (PMI) which measures activity in both manufacturing and services, climbed to 54.4 in January, its highest level since June 2011, from 50.3 the previous month.
"January's survey underscores the striking degree to which momentum in the German economy has shifted from contraction to expansion at the turn of the year," said Tim Moore, senior economist at Markit.
Europe's economic powerhouse expanded robustly during the first two years of the euro zone crisis but growth slowed to just 0.7 per cent last year - and shrank by 0.5 per cent in the fourth quarter, a preliminary estimate showed.
Most economists still see the country escaping a recession, defined as two consecutive quarters of contraction, by growing weakly in the first quarter before regaining momentum.
Business activity in the services sector grew at its fastest rate since June 2011, with the index climbing to 55.7 in January from 52.0 the previous month.
That was well above the long-run average of 52.9 and also above the flash reading of 55.3. It tallies with a recent survey showing consumer morale on the rise heading into February, though data last week showed annual retail sales plunging by their largest amount in over three years in December.
The reading offers hope that domestic demand will be a pillar of support for the economy this year, picking up the slack from weaker exports as the euro zone crisis and a global slowdown sap demand for German products.
Services - including public services not covered in the PMI survey - make up a hefty 68 per cent of Germany's gross domestic product, according to the Federal Statistics Office.
New orders in the private service sector hit their highest since June 2011, boosted by a rise in new contracts in the transport and storage sector.
Survey participants suggested stronger appetite was due to improved business confidence among clients and hopes that the euro zone crisis would abate. The latest Ifo survey showed morale among German companies rising to its highest level in more than half a year in January.
A subindex measuring business expectations in the services sector rose to 55.7, its highest since May 2012, from 50.1 the previous month.
Service providers hired new staff for a second month running, with firms that took on extra employees pointing to new projects and improved morale.
The German jobless rate has fallen to 6.8 per cent, close to a post-reunification low, data showed last week.
The services PMI, together with last week's manufacturing PMI showing only a very slight contraction in January but rises in output and new business, suggests Germany's economy is regaining momentum.
indiatimes.com
Markit's composite Purchasing Managers' Index (PMI) which measures activity in both manufacturing and services, climbed to 54.4 in January, its highest level since June 2011, from 50.3 the previous month.
"January's survey underscores the striking degree to which momentum in the German economy has shifted from contraction to expansion at the turn of the year," said Tim Moore, senior economist at Markit.
Europe's economic powerhouse expanded robustly during the first two years of the euro zone crisis but growth slowed to just 0.7 per cent last year - and shrank by 0.5 per cent in the fourth quarter, a preliminary estimate showed.
Most economists still see the country escaping a recession, defined as two consecutive quarters of contraction, by growing weakly in the first quarter before regaining momentum.
Business activity in the services sector grew at its fastest rate since June 2011, with the index climbing to 55.7 in January from 52.0 the previous month.
That was well above the long-run average of 52.9 and also above the flash reading of 55.3. It tallies with a recent survey showing consumer morale on the rise heading into February, though data last week showed annual retail sales plunging by their largest amount in over three years in December.
The reading offers hope that domestic demand will be a pillar of support for the economy this year, picking up the slack from weaker exports as the euro zone crisis and a global slowdown sap demand for German products.
Services - including public services not covered in the PMI survey - make up a hefty 68 per cent of Germany's gross domestic product, according to the Federal Statistics Office.
New orders in the private service sector hit their highest since June 2011, boosted by a rise in new contracts in the transport and storage sector.
Survey participants suggested stronger appetite was due to improved business confidence among clients and hopes that the euro zone crisis would abate. The latest Ifo survey showed morale among German companies rising to its highest level in more than half a year in January.
A subindex measuring business expectations in the services sector rose to 55.7, its highest since May 2012, from 50.1 the previous month.
Service providers hired new staff for a second month running, with firms that took on extra employees pointing to new projects and improved morale.
The German jobless rate has fallen to 6.8 per cent, close to a post-reunification low, data showed last week.
The services PMI, together with last week's manufacturing PMI showing only a very slight contraction in January but rises in output and new business, suggests Germany's economy is regaining momentum.
indiatimes.com
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