Strong demand from euro-zone countries and domestic customers drove a bigger-than-expected rise in German industrial orders in August, suggesting factories will contribute to growth in Europe’s biggest economy in coming months.

Contracts for goods “made in Germany” were up by 1 per cent on the month, the economy ministry said. That compared with a Reuters consensus forecast for a rise of 0.2 per cent.

Domestic demand rose by 2.6 per cent while foreign orders inched down by 0.2 per cent. However, demand from euro-zone countries rose by 4.1 per cent, nearly offsetting a drop of 2.8 per cent of contracts from outside the common currency region.

The data for July was slightly revised up to a rise of 0.3 per cent from a previously reported increase of 0.2 per cent.

“Industrial orders have been weak so far this year, but they recently picked up slightly,” the ministry said, adding that Ifo’s latest business sentiment survey and Markit’s purchasing manager survey both signalled an improvement.

“Overall, the latest data point to a light upturn in the industrial sector over the rest of the year,” the ministry added. – (Reuters)