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German manufacturing sector nears growth in Sept

Published 10/01/2009, 03:55 AM
Updated 10/01/2009, 03:57 AM

BERLIN, Oct 1 (Reuters) - Germany's manufacturing sector came close to returning to growth in September on a jump in output and new orders, a survey showed on Thursday, in the latest positive sign for Europe's largest economy.

The headline figure from the purchasing managers' index (PMI) for manufacturing rose to 49.6 from 49.2 in August, its highest since August 2008 and in line with a flash estimate released earlier this month.

The rise was the eighth consecutive monthly increase, bringing the index closer to the 50 mark that separates growth from contraction.

A sub-index tracking new orders rose to 54.2 from a revised 53.4, reaching its highest level in 18 months. The earlier flash estimate had placed it at 53.7.

"Germany's manufacturing sector continued to claw its way back from the lows of earlier in the year," said Tim Moore, an economist at data compiler Markit.

"Underlying fragilities in the sector remain, with sharp reductions in employment and inventories highlighting that the rebound in demand has not seen a move towards 'business as usual'," he added.

The data added to a series of positive reports suggesting the economy could be on an upward path after posting surprise growth in the second quarter which pulled it out of its deepest recession since World War Two.

In September, unemployment fell unexpectedly, marking a third consecutive monthly decrease, as statistical changes and government measures cushioned the labour market. Most economists however expect it to rise in the coming months.

(Reporting by Brian Rohan; Editing by Victoria Main)

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