Investing.com - German private sector activity accelerated for first time in 2016 in May, despite a slower rise in new business, according to preliminary data released on Monday.
The Markit composite purchasing managers’ index, which measures the combined output of both the manufacturing and service sectors rose to a five month high of 54.7 in May from 53.6 in the prior month.
Economists had expected a reading of 53.8.
The German manufacturing PMI rose to 52.4 this month, also a five month high, from a final reading of 51.8 in April, against expectations for an uptick to 52.0.
The services PMI rose to a three month high of 55.2 from 54.5 in the prior month. Economists had expected the index to rise to 54.6.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Manufacturers and service providers both reported stronger growth, but some firms struggled to secure new business orders amid an increasingly challenging demand environment.
Despite the slowdown in new business growth, companies continued to add to their workforce numbers at a solid pace, the report said.
Input prices faced by German private sector companies rose for the first time in five months during May. Moreover, the rate of inflation was the strongest since last July.
“A first look at today’s survey results is encouraging, as output growth accelerated for the first time in 2016 so far,” Markit economist Oliver Kolodseike said.