BERLIN (Reuters) - Growth in Germany's manufacturing sector slowed in March, a survey showed on Tuesday, as output, new orders and export orders in Europe's largest economy all rose at weaker rates than a month earlier.
Markit's Purchasing Managers' Index (PMI) for the German manufacturing sector, which accounts for about a fifth of the economy, fell to 53.7 in March from 54.8 in February, down one tick from a flash reading of 53.8.
The final index reading was well above the 50-point threshold that separates growth from contraction, marking the sector's ninth month of expansion.
"Despite weaker growth in March, the German manufacturing economy rounded off its strongest quarter in nearly three years," said Oliver Kolodseike, economist at Markit.
Production at German manufacturers continued to rise on the whole, albeit more slowly than in February. More than one-third of survey participants reported output growth that they attributed to new orders.
Although still the fourth highest reading since May 2011, the sub-index tracking new orders at German manufacturing firms eased to 55.5 from 57.1.
"The data signal that there might still be a few obstacles on the path to recovery," Kolodseike added, noting that employment growth in March edged closer to stagnation and export growth eased to a five-month low.
Berlin is relying on domestic demand to support growth again this year, but demand from the home market was only enough to drive a 0.4 percent expansion in 2013.
A subindex tracking output prices fell to 49.4 from 51.2, below the 50-threshold for the first time since August.
The drop coincided with an overall fall in German inflation, which raised pressure on the European Central Bank to stop any drift toward deflation in the euro zone.
Reporting By Monica Raymunt; Editing by Toby Chopra