German private sector expands in September at fastest rate since January: PMI

Mon Sep 23, 2013 3:32am EDT
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BERLIN (Reuters) - Germany's private sector grew in September at its fastest rate since January, a survey showed on Monday, suggesting Europe's largest economy will grow again this quarter, albeit less than in the previous three months.

Markit's preliminary composite Purchasing Managers' Index (PMI), which tracks growth in both the manufacturing and services sector and covers more than two-thirds of the economy, edged up to 53.8 in September from 53.5 in August.

The reading was above the 50 mark that separates growth from contraction for a fifth straight month as firms benefited from an increase in new business, particularly in the service sector.

"Germany's economy remained firmly in recovery mode during September, and its strengthening performance should continue to reverberate across the euro area," said Tim Moore, senior economist at Markit.

After shrinking in the fourth quarter of 2012 and suffering a subdued start to 2013, the German economy expanded 0.7 percent in the April to June quarter thanks mainly to domestic demand.

Chris Williamson, chief economist at Markit, said PMI surveys suggested the economy would expand by around 0.4 percent in the third quarter.

Staffing levels across the private sector grew at the fastest pace since March 2012. Williamson said firms were likely to hire more staff in the fourth quarter as they are now taking on more new orders and benefiting from rising backlogs of work.

The manufacturing sector expanded for a third consecutive month, though the pace of growth slowed slightly compared with August. A sub-index showed the manufacturing PMI stood at 51.3 in September compared with 51.8 the previous month.

New contracts and orders from abroad both grew at a more subdued pace than in August, with demand from emerging markets waning. Backlogs of work stagnated.   Continued...