BERLIN (Reuters) - A rebound in new orders and job creation helped Germany's private sector grow for the third straight month in July albeit at a slower pace than preliminary figures suggested, a survey showed on Monday.
Markit's final composite Purchasing Managers' Index (PMI), measuring growth in both the manufacturing and services sector and covering more than two-thirds of the economy, rose to 52.1 in July from 50.4 the previous month.
The index stayed above the 50 line that separates growth from contraction for the third month running but was below an initial reading of 52.8.
A pickup in Europe's largest economy is good news for conservative Chancellor Angela Merkel, who is courting votes before an election in September.
"Germany's economy has started the third quarter on a positive footing," said Tim Moore, senior economist at Markit.
Moore said growth was more subdued than in 2010 and 2011, when Germany was recovering from a sharp recession in the wake of the global financial crisis.
Nonetheless, "the change in direction for new order volumes provides a strong signal that Germany's output performance can shift back though the gears during the second half of 2013".
New orders rose for the first time since February, encouraging companies to start hiring workers again.
Recent data has suggested Germany's economy is regaining some traction after shrinking at the end of 2012 and narrowly avoiding a recession in the first quarter. Consumer and business sentiment rose, while unemployment fell.
A Markit survey released last week showed the German manufacturing sector returning to growth in July, expanding at the fastest rate in 1-1/2 years.
A sub-index tracking the services sector edged up to 51.3 in July from 50.4 the previous month, the survey released on Monday showed. It was however lower than a preliminary estimate of 52.5.
Nonetheless business expectations in the services sector improved significantly, firms started hiring again and registered rising orders after a four-month period of contraction in new business.
Reporting By Sarah Marsh; Editing by Hugh Lawson