Germany's private sector economy expanded at the slowest pace in three months during October, as the slowdown in services growth offset an improvement in manufacturing, preliminary data from a survey by Markit Economics showed on Thursday.

The flash composite output index dropped to a three-month low of 52.6 from 53.2 in September. A reading above 50 suggests expansion in the sector, while a level below 50 indicates contraction.

The flash services activity index also fell to a three-month low of 52.3 from 53.7 in September. Economists had expected the score to remain unchanged this month.

The flash purchasing managers' index for the manufacturing sector, meanwhile, rose to a two-month high of 51.5 from 51.1 in the previous month. Economists were looking for a figure of 51.4.

"A slower rate of expansion in services activity meant that overall growth eased slightly from the trend recorded over the third quarter," Markit Senior Economist Tim Moore said.

New business volumes increased for the fourth straight month, but the growth was the slowest since July due to weakness in services. Further, foreign orders in manufacturing grew at the slowest pace in the three months.

Unfinished work volumes were stagnant and jobs were reduced slightly in both manufacturing and services, the survey found.

Input price inflation persisted and costs rose for the fourth month in a row. The latest increase was the fastest in a year, which was partly driven by a return to cost inflation in the factory sector.

However, output prices were broadly unchanged in October. While, manufacturers reported an increase in factory-gate prices, service providers indicated a decline, the first since April.