German factory orders jumped in June amid broad-based domestic demand, pointing to a pickup in momentum in Europe’s largest economy. Orders, adjusted for seasonal swings and inflation, rose 1% after an upwardly revised gain of 1.1% in May, data from the economy ministry in Berlin showed on Friday.
The typically volatile reading compares with a median estimate for a 0.5% increase in a Bloomberg survey. Orders were up 5.1% from a year earlier, when adjusted for working days.
Manufacturing is turning into a driving force of growth in Europe’s largest economy—a trend the Bundesbank sees set to continue. Confidence among businesses is at a record high while steadily declining unemployment supports domestic spending. Even so, economic activity at the start of the third quarter lagged behind that of France, Italy and Spain for the first time in more than 12 years.
“Orders point to another slight revival in industrial production,” the economy ministry said in a statement. “The excellent business climate in manufacturing supports this assumption.”
Orders rose 0.8% in the second quarter from the previous three months. In June, demand was driven by a 5.1% surge in domestic orders. Demand from abroad fell 2%.
The economy ministry will publish industrial-production data on Monday. A purchasing managers’ index released this week showed that German economic activity cooled in July.
HIS Markit’s final composite PMI, which tracks the manufacturing and services sectors that account for more than two-thirds of the economy, fell to 54.7 from 56.4 in June.
