(Writing by Paul Carrel; Editing by Susan Fenton)
BERLIN, March 24 (Reuters) - German business activity
expanded for a second month running in March, boosted by a
services sector revival that more than offset a manufacturing
decline in Europe's largest economy, a preliminary survey showed
on Friday.
S&P Global's German flash composite Purchasing Managers'
Index (PMI) rose to 52.6 in March, up from a final reading of
50.7 for February and surpassing analysts' expectations for a
reading of 51.0.
March was the second month in a row that the indicator was
above the 50 level that marks growth in activity, after seven
consecutive months below the threshold.
The index tracks the services and manufacturing sectors
which together account for more than two-thirds of Germany's
economy.
"The service sector did all the heavy lifting in terms of
driving growth in March," said Phil Smith, economics associate
director at S&P Global Market Intelligence.
The services sector was "also increasingly becoming the main
source of inflationary pressure as pricing power in the
manufacturing sector wanes", he said.
The services sector posted growth for the third month
running, with the services PMI reading rising to 53.9 in March
from a final reading of 50.9 for February.
Manufacturing, on the other hand, fell to 44.4 in March from
a final February reading of 46.3, and remained in contraction
territory for a ninth month running.
"The manufacturing sector lacks momentum right now, with new
orders remaining in decline amid a period of caution among
clients and excess inventory levels," said Smith.
"Unsurprisingly, growth expectations in the sector remain low."
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