Germany's manufacturing, services remained close to highest in three years in March; Markit's index of manufacturing, services fell to 55 from 56.4 in February, which was highest since May 2011

Cindy Allen

March 24, 2014 (Bloomberg LP) – German manufacturing and services activity stayed close to the highest in three years in March as Europe’s largest economy helped keep the region’s recovery on track. An index of manufacturing slipped to 53.8 from 54.8 in February, a survey of purchasing managers published by Markit Economics Ltd. showed today. Economists had predicted a decline to 54.5, according to the median of 33 forecasts in a Bloomberg News survey. A services gauge fell to 54 from 55.9, Markit said. A composite measure of both industries declined to 55 from 56.4 in February, which was the highest since May 2011.

Germany is underpinning a euro-region recovery that’s under threat from a stronger euro and a slowdown in China. Unemployment fell for a third month in February and shares in Bayerische Motoren Werke AG rose to a record last week after the carmaker forecast a significant gain in 2014 profit.

“Germany’s private sector economy continued to grow at a record pace at the end of the first quarter,” Oliver Kolodeseike, an economist at Markit, said in an e-mailed statement. “Although the rate of expansion in activity eased to a three-month low, growth in the three months to March was the joint-strongest since mid-2011.”

The report comes after another survey today showed manufacturing in China weakened for a fifth straight month, deepening concern the nation will miss its 7.5 percent growth target this year. The Purchasing Managers’ Index from HSBC Holdings Plc and Markit dropped to 48.1, compared with the 48.7 median estimate of 22 analysts surveyed by Bloomberg News and February’s final 48.5 figure.

In France, the euro region’s second-largest economy, manufacturing activity unexpectedly resumed growth in March, Markit said earlier.

The euro, which has appreciated 6.4 percent against the dollar in the last 12 months, was trading at $1.3794 at 8:35 a.m. in London.

--With assistance from Kristian Siedenburg in Vienna.

To contact the reporter on this story: John Fraher in London at jfraher@bloomberg.net To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net; Heather Harris at hharris5@bloomberg.net Zoe Schneeweiss

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