Higher output and stronger new orders led to faster growth in Germany's manufacturing sector in July, a survey showed on Wednesday.
Markit's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about a fifth of the economy, rose to 56.9 from 55.9 in June. July matched May's reading and was well above the 50 line that separates growth from contraction.
The figure was lower than a flash reading of 57.3, however.
"The beginning of the second half of the year brought a faster rise in manufacturing growth among German manufacturers. Following a dip in overall performance in June, the upturn in output and new orders strengthened," said IHS Markit economist Sian Jones.
"That said, the increase in production continued to outpace that of new orders as firms expanded their efforts to clear backlogs."
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The German economy has gained momentum after a soft patch in the first four months of the year, but the outlook remains clouded by concerns over trade friction.
IHS Markit said companies were nevertheless positive: the level of optimism toward future growth was the highest since April.
"Concerns were raised however, with some respondents noting uncertainty surrounding tariffs and further marked rises in input costs as risks to future growth," Jones said. "In turn, pressure on supply chains remained significant as firms continued to comment on bottlenecks at suppliers."
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