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German private sector expansion eases in March: PMI

Robot arms coat a Porsche Macan at the new plant in the eastern German city of Leipzig February 5, 2014. REUTERS/Tobias Schwarz
Robot arms coat a Porsche Macan at the new plant in the eastern German city of Leipzig February 5, 2014. REUTERS/Tobias Schwarz

BERLIN (Reuters) - Growth in Germany's private sector eased to a five-month low in March after scaling a 33-month high the month before, a business survey showed on Thursday.

Markit's final composite Purchasing Managers' Index (PMI), which tracks growth in the manufacturing and service sectors, fell to 54.3 in March from 56.4 in February.

It remained above the 50 point line denoting expansions in activity for the 11th straight month.

"Companies reported that although unusually mild weather was still having a noticeable positive impact in March, it had boosted output growth (less) than at the beginning of the year," said Oliver Kolodseike, Markit economist.

Markit's PMI for the service sector alone fell to 53.0 in March from 55.9 in February, a full point down from a flash reading of 54.0.

Though slower, growth in March was broad-based, with companies in all six monitored sub-sectors reporting greater business activity. The steepest increase in growth was reported by mail and telecommunication companies.

Another markit survey earlier this week showed a weaker pace of growth in the manufacturing sector as output, new orders and export orders rose more moderately.

"Nevertheless, service providers remained optimistic about their year-ahead outlook, with the level of positive sentiment remaining at a historically high level," Kolodseike added.

A subindex for service sector business expectations matched February's second-highest reading since April 2011. Service providers attributed the better mood to a domestic economic upturn, increased order intakes and export opportunities.

Inflationary pressures on service providers eased in March, with input costs rising at their slowest rate in 43 months. The smaller rise in inflation, linked to higher energy prices and rising staff costs, led German service providers to raise output charges less steeply than the preceding month.

(Reporting By Monica Raymunt; Editing by Hugh Lawson)