The flash composite output index was significantly stronger than expected and points to the first increase in business activity in 10 months. At 50.5, the latest reading was nearly 2 points above the market consensus and almost 3 points clear of March's final 47.7.

However, in line with its French neighbour, it was services doing all the work. The flash sector PMI weighed in at a solid 53.3, up from March's final 50.1 and also a 10-month high. By contrast, at a lowly 42.2 its manufacturing counterpart remained in the doldrums and indicative of a deep and ongoing contraction. The output sub-index stood at 45.0.

Aggregate new orders fell again as a steep drop in manufacturing more than eclipsed a rise in services. Much the same pattern applied to backlogs and a modest gain in total employment was similarly restricted by weakness in goods producing. Still manufacturers' business expectations about the year ahead improved to their best level in a year whereas confidence in services eased from March's 25-month high.

Meantime, overall input cost inflation ticked up from March's 3-month low, mainly reflecting increased wage pressures in services. Output price inflation also moved off the previous period's 37-month low as rises in services just more than offset another steep fall in manufacturing.

Much like France, today's update paints a very lopsided picture of German economic growth. In itself, this is not good news for the sustainability of the recovery though for the ECB, it will be developments in services that cause the most concern. Stronger activity seems to be supporting increased inflationary pressure, a point that will not be wasted on the Governing Council's hawks. The April update lifts the German RPI to 18 and the RPI-P to 19, both measures now showing economic activity in general running slightly ahead of market expectations.

Manufacturing sank into even deeper contraction in March, to 41.9 from February's 42.5. Only slight improvement to 43.0 is expected for April. Services, which in March rebounded nearly 2 points to 50.1, are seen rising further to 50.5. Consensus for April's composite is 48.6 following March's 47.7.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around ten days ahead of the final report and are typically based upon around 85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.