German factory orders beat forecast, up 2 percent in June

The strength of demand for orders outside Europe, which soared 6.3 percent in June, was largely down to the weakness of the euro against the dollar, Bayern LB economist Stefan Kipar said. The jump was entirely driven by foreign demand, which rose 4.8% in a single month.

The German economy, the biggest one in Europe, expanded mildly by 0.3 percent in the first quarter with private consumption as its main driving force.

Economists polled by Reuters had expected exports to fall by 0.5 percent and imports to rise 0.5 percent.

“The conditions for the sector remain good”, the ministry said in a statement.

And indeed, factory orders reported on Thursday by German industry for June were up sharply by 2 percent, with a weak euro fueling strong global demand.

German gross domestic product (GDP) data is due to be published on Friday.

“The trend of new orders is clearly pointing upward”, the German Economy Ministry said in a statement, adding that the average of new orders in the second quarter was higher than in the first three months of this year.

Germany’s trade surplus narrowed to 22 billion euros (US$24 billion) in June, according to seasonally adjusted figures released by federal statistics office Destasis.

Some recent forward-looking data has provided grounds for optimism, with business morale improving after Greece and its creditors reached an agreement. Food-processing technology maker GEA’s orders dropped by 9 percent on an organic basis in the second quarter.