Germany’s private sector grew at a faster pace in August as humming factories shifted into a higher gear, a survey showed yesterday, suggesting that Europe’s biggest economy is likely to continue its robust upswing in the third quarter.

Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, rose to 55.7 from its 10-month-low of 54.7 in the previous month.

This beat the consensus forecast in a Reuters poll of economists, who had expected a stable reading. It was also well above the 50 mark that separates growth from contraction.

The German economy expanded by 0.7 per cent in the first quarter and by 0.6 per cent in the second

The stronger-than-expected headline figure showed that underlying growth remains strong, IHS Markit Associate Director Andrew Harker said, adding that he expected a quarterly growth rate of roughly 0.5 per cent for the July-September period.

The German economy expanded by 0.7 per cent in the first quarter and by 0.6 per cent in the second, driven by soaring private consumption, increased state spending and higher industrial output.

Harker said Markit was likely to raise its growth forecast for 2017 from its latest projection of two per cent.

The German economy grew by 1.9 per cent last year.

Growth in manufacturing accelerated to 59.4 in August, the third-highest reading in more than six years, the survey showed.

Analysts had expected the sector to lose some steam.

Services business activity also increased, with Markit’s sub-index for the sector rising to 53.4. This was slightly better than analysts had predicted. New export orders at goods-producing companies jumped by the sharpest rate in more than seven years, with survey panellists pointing to especially strong demand from Asia, Markit said.