A rise in output helped German manufacturing activity expand for the second month running in November, 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 fourth month running with a reading of 53.5, up from 52.3 in October.
A reading of 50 marks the threshold separating growth from contraction.
The manufacturing headline index rose to 52.0 from 51.0, lifted by a near two-point jump in the sub-component tracking output in the sector.
"It's still very much the manufacturing sector which is powering the upturn," said Markit's chief economist Chris Williamson. "There is strong demand feeding into Germany -- they are still the world's biggest exporters."
Germany exited its deepest postwar recession in the second quarter, when gross domestic product (GDP) expanded by 0.4 per cent as global demand picked up.
The recovery gained strength in the third quarter, when the economy grew by 0.7 per cent quarter-on-quarter.
However, the Finance Ministry said on Friday that GDP was likely to slow in the final quarter of 2009 and the euro's strength against the dollar was having a negative impact on the country's firms.
Mr Williamson said the strength of the euro was one of the issues forcing companies to focus on cost-cutting, for example cutting jobs, in order to remain competitive.
Job cuts could in turn dampen domestic private consumption, he added, especially damaging the service sector where new business contracted for the first time since July.
The headline services PMI, tracking businesses ranging from banks to bookshops, rose to 51.5 from 50.7 a month prior, versus a consensus forecast for 51.2.
The service PMI's business expectations sub-index held above the key 50 mark for a seventh month running although it fell to 56.8 from 57.7, in a sign of a more tempered outlook.
Reuters