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German private sector grows, points to 0.3% growth in Q2: PMI
[BERLIN] Germany's private sector grew at a faster rate in June than in the previous month, a survey showed on Tuesday, suggesting Europe's largest economy expanded by 0.3 per cent between April and June as it ended the quarter on a solid footing.
Markit's flash composite Purchasing Managers' Index (PMI), which tracks manufacturing and services activity that accounts for more than two-thirds of the economy, rose to 54.0 from 52.6 in May, coming in above the 50 mark that separates expansion from contraction for a 26th consecutive month.
While the average PMI reading for the second quarter was slightly lower than in the first, Markit chief economist Chris Williamson said the latest PMI surveys pointed to the economy expanding by 0.3 per cent in the April-June period - on a par with its performance in the first three months of 2015.
"GDP growth of 0.3 per cent, if we recorded that, is reasonable but ... given the amount of stimulus in the eurozone economy at the moment you would be expecting better growth figures than that," he said.
Mr Williamson also said lingering uncertainty about Russia and the Greek debt crisis were affecting the business environment in Germany while German firms were also struggling due to increased competition from other countries like Spain and Ireland.
The services sector grew at its quickest pace since March as firms became more optimistic about their future prospects but the picture was not entirely rosy - order growth was not as steep as in May, the rate of hiring slowed and input costs rose more steeply than output prices, squeezing margins.
The manufacturing sector fared slightly better than in May as factories raised production and new work flowed in faster. They also stepped up purchasing activity and boosted recruitment, suggesting they expect output to pick up in the coming months.