A jump in Italian factory orders drove up euro zone industrial demand by more than expected in December compared to a month earlier, data showed on Wednesday, in the latest sign of an economic stabilisation at low levels.
Manufacturing orders in the 17 countries that share the euro rose 1.9 percent in the month, the European Union's statistics office Eurostat said. Economists polled by Reuters had expected a 0.7 percent increase in December.
Stripping out volatile orders for planes, trains and other heavy transport equipment, industrial new orders rose 2.5 percent from November, Eurostat said.
In Italy, new orders for factory goods rose 8 percent in December, offsetting a 0.7 percent fall in France and a 1.2 percent slide in Spain.
After a collapse in business confidence last year stemming from the euro zone's sovereign debt crisis, investors, companies and households are more optimistic the bloc can resolve the saga, now in its third year.
Despite a likely recession in the euro zone this year, many economists say the worst is now passed and economic activity will pick up in the second half of 2012. In a possible sign of that, new orders for capital goods -- machinery to produce other goods -- rose 4.2 percent in December from November.
Still, the euro zone's sick economy was underscored by very weak annual data. Industrial orders fell 1.7 percent in December versus the same period a year ago and demand in France slumped 5.2 percent in the month compared to December 2010.
(Reporting By Robin Emmott)