BERLIN, June 1 (Reuters) - Rising demand at home lifted German factory activity to a four-month high in May, a survey showed on Wednesday, while subdued demand from abroad prevented a stronger expansion.
Markit's Purchasing Managers' Index for manufacturing, which accounts for about a fifth of the economy, rose to 52.1 in May from 51.8 in April.
The reading was the highest since January and above the 50 line that separates growth from contraction. It was lower than the flash reading of 52.4, however.
Production also posted its strongest increase since January, while manufacturers raised hiring for the second month running even as job creation remained unchanged from April and modest overall.
"New business also continued to rise despite subdued demand from international markets hindering a stronger expansion," said Markit economist Oliver Kolodseike. "Nevertheless, the survey data suggest that the overall rate of growth in German manufacturing remains lacklustre."
Input prices fell at their slowest rate since December 2015, leading manufacturers to raise their output prices.
"In a sign that companies expect prices for inputs to increase in the future, some firms raised their purchasing
activity during the month. Nonetheless, overall input costs continued to decline, although at the slowest pace in 2016 so far."
