BERLIN - Germany's private sector kept expanding steadily in May, surveys showed on Thursday, suggesting Europe's largest economy is on track for further economic growth in the second quarter.
Markit's preliminary composite Purchasing Manager's Index (PMI), which tracks activity in the manufacturing and services sectors and covers more than two-thirds of the German economy, came in at 56.1, unchanged from April.
May is the 13th straight month that the composite PMI has been above the 50 mark denoting growth, and the reading was only slightly below February's 56.4 - the highest figure in more than 2-1/2 years.
The composite employment index climbed to 53.0 - the highest since late 2011 - from 51.9 in April.
While the index for the services industry rose to a 35-month high of 56.4 from 54.7 in April, higher than expected in a Reuters poll, growth in manufacturing slowed more than expected, with the index falling to 52.9 from 54.1, the surveys showed.
In the first quarter the German economy expanded 0.8 percent, the fastest rate of growth in three years, thanks to strong domestic demand and mild weather.
According to the Bundesbank and government, however, economic growth will probably slow in the second quarter.
Markit economist Rob Dobson hit a more optimistic tone for the second quarter: "On the basis of our data, we would expect around the 0.8 percent we saw in the first quarter... it might ease slightly to around 0.7 percent."
"Germany really has put itself in a position where it can grow reasonably strongly for the foreseeable future," he added.
The German government expects the economy to grow by 1.8 percent this year and by 2.0 percent in 2015, with domestic demand as a main pillar of support, making up for weak exports - traditionally the backbone of the German economy.
Reporting by Michael Nienaber; Editing by Hugh Lawson