Investing.com - Private sector output in Germany maintained strong growth momentum in January, fueling optimism over the health of the euro zone's largest economy, preliminary data showed on Wednesday.
Market research group Markit said that its Flash German Composite Output Index, which measures the combined output of both the manufacturing and service sectors registered a reading of 58.8 in January, little changed from December’s 80-month high of 58.9, and beating forecasts for 58.6.
The preliminary German services purchasing managers’ index rose to a nearly seven-year high of 57.0 this month from 55.8 in December, easily topping expectations for a reading of 55.6
The flash manufacturing purchasing managers’ index declined to 61.2 from a final reading of 63.3 in December. Analysts had expected the index to slip to 63.2 in January.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Germany’s economy maintained strong growth momentum at the start of 2018 thanks to the fastest rise in service sector business activity for nearly seven years.
Growth in the manufacturing sector was meanwhile below the record level seen at the end of 2017 but still among the highest seen over the past two decades.
Job creation in the private sector economy meanwhile gathered pace to reach the fastest seen since early-2011.
Commenting on the report, Phil Smith, Principal Economist at Markit, said, “Undeterred by ongoing political uncertainty and rising cost pressures, firms showed strong optimism towards the outlook for 2018, with the degree of confidence the highest since comparable records began in mid-2012."
EUR/USD was at 1.2322 from around 1.2318 ahead of the release of the data, while EUR/GBP was at 0.8772 from 0.8770 earlier.
Meanwhile, European stock markets were mostly lower after the open. Germany's DAX fell 0.4%, the EURO STOXX 50 dipped 0.2%, France’s CAC 40 inched down 0.1%, while London’s FTSE 100 declined 0.5%.