Germany's private sector grew at the fastest pace in nearly six years in March, a survey showed on Friday, driven mainly by strong demand for manufactured goods from the United States, China, Britain, and the Middle East.
The reading suggests that growth in Europe's largest economy will accelerate in the first quarter.
Markit's flash composite Purchasing Managers' Index (PMI), which tracks activity in the manufacturing and services sectors that account for more than two-thirds of the economy, rose to 57.0 from 56.1 in February.
The reading, a 70-month high, overshot the consensus forecast in a Reuters poll of economists and was above the 50 mark that separates growth from contraction.
The survey showed that activity among manufacturers accelerated to a 71-month high and in the services sector it was the highest rate of growth in 15 months.
"The PMI data strongly suggest that economic growth will accelerate in the first quarter," said Markit economist Trevor Balchin.
Companies responded to the rising demand by speeding up hiring: the rate of job creation almost matched a record set six years ago.
Inflationary pressures rose again with steel, oil and the strong U.S. dollar cited as key sources of cost pressures, Markit said, forcing companies to partially pass on the higher costs to customers.
Germany's inflation rate rose to 2.2 percent in February from 1.9 percent a month earlier, driven mainly by rising energy and food costs.
Markit said it forecasted headline inflation to reach 2.1 percent in 2017.
Output expectations also strengthened in March and in the services sector sentiment was strongest in more than six years.
"The March flash PMI results rounded off a strong first quarter for the Germany economy," Balchin said.
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