Stronger than expected growth among service providers drove a faster expansion in Germany's private sector in February, a new survey showed today.
The figures are the latest sign that Europe's largest economy is gaining momentum and continues to drive a regional recovery.
Markit's preliminary composite Purchasing Managers' Index (PMI), which tracks activity in the manufacturing and services sectors and covers more than two-thirds of the economy, rose to 56.1 in February, up from January's 55.5.
The reading was above the 50 mark denoting growth for the tenth month in a row and the highest since June 2011.
"Germany is positively surging," said Chris Williamson at Markit. "The PMI is consistent with growth of 0.7% in the first quarter and we could see that exceeded if the rate of expansion continues to accelerate further."
New orders across the private sector piled up at the fastest pace in three months.
Markit said anecdotal evidence suggested rising work inflows were due to greater demand from both domestic and foreign markets, and unusually mild weather.
While Germany was a growth engine in the early years of the euro zone crisis, its performance tailed off over the last two years and it only managed an expansion of 0.4% in 2013.
Economists are forecasting growth will accelerate this year. The government has forecast expansion of 1.8%.
A sub-index for business activity in the services sector rose to 55.4 from 53.1 in January, beating the consensus forecast in a Reuters poll for 53.4 and even the highest estimate for 54.
Employment in the services sector grew at the fastest rate in slightly more than two years, while companies' business expectations were at the highest level in nearly three years.
The sub-index for the manufacturing sector eased to 54.7 from 56.5 in January, undershooting the consensus forecast in a Reuters poll for 56.3. But Markit's Williamson said this was no cause for concern, as the expansion was still one of the steepest since early 2011.
Markit said this year looked set to be a year of stronger global growth which would benefit Germany's export-oriented manufacturers.
Its February survey of German manufacturers shows new export orders rising at the second-sharpest rate in almost three years, with the US, Asia, the Middle East, Poland and Russia mentioned as sources of growth.
Recent backward-looking hard data for Germany has been subdued, with exports, industrial output and orders all falling in December.
But sentiment indicators have mostly painted a rosy picture of the economy, with consumers feeling their most upbeat in more than six years and business morale rising.