* Private sector returns to growth in Aug
* Services sector index at highest since April 2008
* Manufacturing nears growth, highest level in 12 months
* Business expectations most upbeat in over 3 1/2 years
By Brian Rohan
BERLIN, Aug 21 (Reuters) - A jump in output and expanding order books pulled Germany's private sector out of an 11-month slide and returned it to growth in August, a key survey showed on Friday.
A flash estimate of the Markit composite purchasing managers' index (PMI), which surveys the service and manufacturing sectors, rose to 54.2 from 49.0 in July, passing the 50 mark that separates contraction from expansion.
August's jump was the largest single monthly increase since composite data was first collected in 1998, putting the overall index at its highest level since May 2008.
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.
The headline services PMI, tracking businesses ranging from banks to bookshops, blew past expectations and surged to 54.1 in August from 48.1 in July.
A consensus forecast from economists polled last week by Reuters had pointed to a reading of 48.7.
The positive news came just a day after the Bundesbank said Germany's economy could fare much better in the third quarter than in the second, when it grew unexpectedly by 0.3 percent.
BOUNCE IN ACTIVITY
Economists at data compiler Markit said a recovery was underway but it was unclear if further economic contraction could be written off.
"Particularly with the services sector, the activity index rose quite sharply, but the new business reading didn't increase as much," said Markit's Rob Dobson.
"This suggests that unless demand starts to increase much more, that bounce in activity may not be sustainable," he added.
Germany's Finance Ministry had also given a tempered assessment on Thursday, saying it was unclear if this quarter's return to growth was sustainable.
"It is not clear at the moment whether the economic stabilisation will hold," the ministry said in its monthly report for August.
The PMI's sentiment measure charged forward however in August, following the ascent earlier this week of the ZEW economic institute's gauge of analyst and investor morale, which rose to its highest level in more than three years.
The PMI's business expectations sub-index for services held above the key 50 mark for a fourth month running and rose to its highest level since January 2006.
The manufacturing index rose to 49.0 from 45.7 in July, and a sub-index tracking new manufacturing orders jumped to 53.4 from 50.4 -- its highest level since March 2008.
The PMI figures chimed with recent German data suggesting that the worst may be over for Europe's largest economy.
The rise in German gross domestic product in the second quarter brought an end to the country's deepest recession since World War Two and has boosted hopes of recovery in the broader euro zone.
The government expects the economy to contract by some six percent this year, but the second quarter growth could prompt it to reconsider that forecast. (Reporting by Brian Rohan, Editing by Toby Chopra)