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German manufacturing growth gains pace on strong new orders: PMI
[BERLIN] German manufacturing sector growth gained pace in February, driven by the strongest rise in new orders in seven months, a survey showed on Monday, sending a reassuring signal after January's sluggish expansion.
Markit's purchasing manager's index (PMI) for the manufacturing sector, which accounts for about a fifth of the economy, rose to 51.1 from January's 50.9, topping a preliminary February reading of 50.9.
The index has held above the 50 line separating growth from contraction since November.
"While growth rates remained below levels seen at the start of last year, an improving economic environment and a weak euro should help boost demand in coming months," Markit economist Oliver Kolodseike said in a statement.
Rising demand from Asia and the United States helped stimulate export growth, he said, while low oil prices pushed down input prices and costs, allowing companies to lower their selling prices.
Private consumption has overtaken exports as Germany's main engine of growth as Germans feel richer and more inclined to spend than save. Negotiated wages climbed by an average of 3.2 per cent last year, more than three times the rate of inflation.
Data and sentiment surveys so far suggest Europe's largest economy is starting 2015 on a strong footing.
The economy expanded by 0.7 per cent in the final quarter of 2014, after narrowly avoiding recession in the middle of the year as the eurozone's weakness and uncertainty over conflict in Ukraine weighed on confidence.