BERLIN,(Reuters) - Stronger-than-expected growth among service providers helped Germany's private sector expand faster in February, a survey showed on Friday, suggesting Europe's largest economy is on track for solid growth in the first quarter.
Markit's flash composite Purchasing Managers' Index (PMI), which tracks growth in the manufacturing and services sectors that account for more than two-thirds of the economy, climbed to 54.3 in February, up from a final reading of 53.5 in January.
That reading was well above the key 50 threshold dividing growth from contraction and was the highest since July 2014.
"The key driver that we saw this month was in the service sector," said Chris Williamson at Markit. But he said manufacturers needed to see stronger orders to drive a more robust upturn.
A subindex for the services sector rose to 55.5 from a final reading last month of 54.0, beating the consensus forecast in a Reuters poll for 54.2 and even the highest estimate of 55.0.
Employment in the services sector grew at its fastest pace in slightly more than three years.
The subindex for manufacturing was unchanged from January at 50.9, undershooting the Reuters consensus forecast of 51.5.
Williamson said the PMI pointed to growth of 0.4 percent in the first quarter with more upside if March turns out to be good.
Germany's growth outlook has brightened in recent months after dodging a recession in the middle of last year.