German private sector business activity rose at the fastest pace in five months in July, preliminary results of a survey by Markit Economics showed Wednesday.
The composite output index, that measures performance of both manufacturing and services, rose to a five-month high of 52.8 in July from 50.4 in June. Readings above 50 indicates expansion in activity.
The expansion was underpinned by a return to new business expansion in July, ending a four-month period of contraction, Markit said in the report. This improvement was driven by rising levels of domestic demand as new export volumes dropped for the fifth consecutive month.
The purchasing managers' index, a gauge of factory activity, rose to 50.3 in July from 48.6 in June. This was also the highest reading in five months and higher than economists' forecast of 49.2.
The manufacturing output index rose to a 17-month high of 53.4 in July from 50.5 in June.
The services activity index advanced to 52.5 in July from 50.4 in June. This was above expectations of 50.7.
Both the manufacturing and service sectors posted only moderate increases in new business volumes during the latest survey period.
Staff levels in private sector firms increased in July following two months of moderate declines. The employment growth was driven by the service sector, as manufacturing workforce levels remained broadly unchanged since the previous month.
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