BERLIN (Reuters) – German business activity expanded for a third month running in April, boosted by a turnaround in the services sector that more than offset a decline in manufacturing in Europe’s biggest economy, the a preliminary survey on Friday.
The HCOB German Flash Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to a 12-month high of 53.9 in April from 52.6 in March, beating analysts’ expectations for a reading of 52.7.
April was the third consecutive month that the indicator was above the level of 50 indicating growth in activity, after seven consecutive months below the threshold.
The index tracks the services and manufacturing sectors that make up more than two-thirds of Germany’s economy.
The services sector posted growth for the fourth month running supported by rising demand, with the services PMI reading rising to 55.7 in April from 53.7 in March.
“In the service sector, the ability of companies to push higher prices has softened somewhat, as they continue to face strong increases in input costs,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
The manufacturing PMI, meanwhile, fell to 44.0 in April from 44.7 in March, and remained in contraction territory for the 10th month running.
The economist said the labor market will remain tight in Germany. “This is good news for the people and from a broader economic perspective,” said de la Rubia.
(Reporting by Maria Martinez; Editing by Hugh Lawson)