[BERLIN] German factory activity rose to a three-month high in April, buoyed by rising demand at home and abroad, a survey showed on Monday, but doubts about the health of the global economy kept the growth modest.
Markit's Purchasing Managers' Index for manufacturing, which accounts for about a fifth of the German economy, rose to 51.8 in April from 50.7 in March.
The reading was the highest since January and above the 50 line that separates growth from contraction. But it was slightly lower than the flash reading of 51.9.
Output by manufacturers narrowly increased and growth in new orders rose to its highest level since January. Job creation rose at the fastest pace in three months.
"In a sign that companies grew more confident about future workloads, employment was raised for the first time in three months," Markit economist Oliver Kolodseike said.
"Moreover, with levels of unfinished business rising and inventories of finished goods failing, there's a good chance that production will be ramped up in coming months to work through backlogs and replenish stock," he added.
New export contracts increased in April at the fastest rate since January. Companies cited stronger demand from China, southern Europe and the United States as the main sources of new export work.
Lower input prices prompted manufacturers to cut their selling prices, but the reduction was lower than that seen in March.