RTTNews - Germany's factory orders rose more than expected in June on robust foreign demand, giving enough hopes for a notable increase in industrial production in the coming months.

Orders rose 4.5% month-on-month in June, the biggest gain in two years, after an increase of 4.4% in May, data released by the Federal Ministry of Economics and Technology showed Thursday. Economists had forecast a slight increase of 0.6%. Orders grew for the fourth straight month in June.

The ministry said the strong monthly increase was led by foreign orders, which climbed 8.3% on a monthly basis. Orders from other Eurozone economies jumped 13.2% and those from countries outside the region climbed 4.8%. Domestic orders grew 0.2%.

This gives reason to expect large gains also in industrial production for the months ahead, Commerzbank analyst Simon Junker said. Order intake should continue in the third quarter, the analyst added.

Further, Junker said, We expect a large gain in GDP for this quarter, although the German economy will probably experience only an anaemic upturn medium-term owing to the aftershocks of the financial crisis.

Compared to the previous year, factory orders plunged 25.3% following a fall of 29.4% in May. Orders has been falling since May 2008.

The Markit/BME purchasing managers' index for the manufacturing sector rose to a ten-month high in July, suggesting that the sector is heading for a recovery.

Recent surveys revealed that German businesses and consumers are now less skeptical about the economy.

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