German private sector grows for eighth month in Dec - PMI

BERLIN (Reuters) - Germany's private sector expanded for the eighth month running in December although growth among services providers eased slightly from a 2-1/2 year peak in November, a survey showed on Monday.

Markit's final composite Purchasing Managers' Index (PMI), which tracks growth in the manufacturing and services sectors, stood at 55.0 in December, comfortably above the 50 mark that separates growth from contraction.

The expansion was slightly weaker than the flash estimate of 55.2 and November's final reading of 55.4.

"Germany's private sector finished 2013 with a further strong expansion of business activity," said Markit economist Tim Moore.

"The improving underlying business climate in Germany led to a rebound in job creation ... with manufacturing employment returning to growth while service sector companies added to their workforce numbers at the fastest rate for two years."

New work increased for the sixth month in a row and backlogs of work grew at a faster pace than in November, suggesting companies may have to step up production. In further positive news, cost inflation eased.

The PMI tracking the services sector, released on Monday with the composite index, eased to 53.5 from November's 55.7, below an initial estimate of 54.0.

"Service providers are optimistic overall about the prospects for business activity in 2014," said Markit's Moore.

The upbeat mood among service providers tallies with recent data showing positive sentiment among firms, consumers and investors. A key survey by the Ifo think tank showed business morale hitting its highest level since April 2012 in December.

"Strong expectations of year-ahead output growth stand in marked contrast to the broadly neutral business outlook reported before the start of 2013," said Moore.

After steaming ahead during the early years of the euro zone crisis, the German economy slowed in 2012 and had a subdued start to 2013 before bouncing back in the second quarter.

Manufacturing in particular dragged on growth at the start of last year but it picked up towards the end of 2013. The PMI tracking the sector, released last week, showed it expanding at the fastest rate in 2-1/2 years in December.

Economists estimate German economic growth will triple in 2014 from around 0.5 percent last year.

(Reporting by Sarah Marsh; Editing by Catherine Evans)