April saw private sector business activity expand for the first time in 10 months. The final composite output index weighed in at 50.6, a tick above its flash estimate and, crucially, above the 50-growth threshold.

The minimal headline revision and indeed overall buoyancy was wholly attributable to services even though the 53.3 flash sector PMI was trimmed a notch to 53.2. This was still more than three points above its final reading in March and contrasts sharply with its 42.5 manufacturing sector counterpart. Services saw demand increase for the first time in 10 months with the rise driven by the domestic market. As a result, backlogs posted their first gain in nearly a year, encouraging businesses to add to headcount at an above average and accelerated rate. Confidence about the coming year was down slightly versus March's 25-month high but was still above its historic norm.

Cost inflation eased slightly but operating expenses again increased sharply. Consequently, having touched a 34-month low previously, output price inflation re-accelerated and was well above its long-run average.

The German economy in general seems to be over the worst but with manufacturing still weighing heavily, the recovery remains dependent on services. Indeed, without renewed growth in goods production, GDP will continue to struggle. Even so, price pressures in services are firm enough to ensure no complacency about inflation at the ECB. Today's update puts the German RPI at 21 and the RPI-P at 33. Overall economic activity may be sluggish, but it is still outperforming market expectations.

No revisions are expected leaving the key composite output index at 50.5, up from March's final 47.7.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.

The Purchasing Managers Index (PMI) survey has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.