(Adds details, economist quotes, background)
By Sarah Marsh
BERLIN, April 4 Domestic demand drove a
stronger-than-expected 0.6 percent rise in German industrial
orders in February, Economy Ministry data showed on Friday,
marking the fourth consecutive monthly gain and underscoring the
pickup in Germany's mighty industry.
The increase in seasonally-adjusted orders beat the
consensus forecast in a Reuters poll of 32 economists for a rise
of 0.1 percent. The gain in January orders was revised downwards
to 0.1 percent from an originally reported 1.2 percent.
Domestic orders were up 1.2 percent, driven by demand for
intermediate and capital goods, while contracts from abroad
inched up 0.2 percent.
"Order books are well filled ... and that supports the
economy because production should remain strong," said Thomas
Amend at HSBC Trinkaus, noting that mild winter weather had
fostered the recovery in the industrial sector.
"Gross domestic product will likely grow slightly stronger
in the first quarter than at the end of 2013."
Germany's export-oriented industry struggled to gain
traction last year against the backdrop of a weak global
economy. But it picked up towards the end of 2013 and looks set
to perform better this year.
That is in line with the overall performance of the German
economy, Europe's largest, which powered through the early years
of the euro zone crisis but weakened towards the end of 2012 and
start of 2013.
After growth of just 0.4 percent last year, economists
expect expansion of around 1.8 percent in 2014, reflecting a
pickup worldwide and particularly in the euro zone, emerging
from its debt crisis.
The orders data on Friday showed a 12.2 percent surge in
contracts from the euro zone for capital goods after a 18.1
percent drop in January. Overall orders from the euro zone were
up 5.9 percent, contrasting with a 3.1 percent drop in orders
from countries beyond the currency bloc.
"The decrease of orders from non euro zone countries
indicates that the impact from emerging market woes at the
beginning of the year on the real economy could be bigger than
buoyant confidence indicators made us believe," said Carsten
Brzeski at ING.
(Additional reporting by Stephen Brown and Rene Wagner)