German growth rises to 31-month high

The German economy made a good start in 2014, as Germany composite output index rose to a 31-month high of 55.9 in January, the Markit Institut announced on Thursday. Germany's composite output index rose by 0.9 points to 55.9 in January, according to the survey conducted with 800 industrial and service companies. The acceleration of output growth largely reflected increased production at manufacturers, with the sharpest rate of output growth since April 2011. Higher order intakes and unusually good weather were cited as some of the reasons behind the latest rise. Meanwhile, manufacturers saw the steepest rise in order intakes in 32 months, as the purchasing managers' index climbed two points to 56.3, due to increased new business from non-EU-countries and mild weather. Despite accelerated output and new order growth, "the fact that the employment was weaker than in the previous two months shows that the economic recovery cannot be taken for granted," said Oliver Kolodseike from Markit Institute. However, both manufacturers and service providers indicated higher employment levels. Manufacturing new export orders also rose at the sharpest pace since April 2011 in January, as the manufacturing output index increased to a 33-month high of 60.4. Driven by strong business inflows, German goods producers meanwhile signalled the sharpest increase in purchasing activity in more than two-and-a-half years, the survey said.