By Michael Nienaber
BERLIN (Reuters) - German industrial orders rose more than expected in March due to buoyant foreign demand especially from countries outside the euro zone, data showed on Monday, in a sign that a solid start to the year for Europe's biggest economy may extend into the second quarter.
Contracts for 'Made in Germany' goods were up 1.9 percent on the month, the biggest increase since last June, the Economy Ministry said on Monday. That beat a Reuters consensus forecast for a rise of only 0.7 percent.
While domestic orders fell by 1.2 percent, foreign demand rose by 4.3 percent, with orders from euro zone countries edging up by 1.1 percent and bookings from countries outside the currency bloc soaring by 6.2 percent.
"The solid economic development in the U.S. is currently an important pillar of (German) domestic industry," said VP Bank economist Thomas Gitzel, adding that companies also seemed to be benefiting from recent positive economic news from China.
"So after today's data, we all can breathe easily," he said.
Dirk Schlotboeller, economist at DIHK Chambers of Commerce, said that weak domestic investment remained a problem for the German economy. "Domestic orders are again disappointing, the trend is still pointing downward," Schlotboeller said.
A breakdown for sectors showed bookings for capital goods and consumer products surged, while demand for intermediate goods was weaker than in February.
The data for February was revised up to a fall of 0.8 percent from a previously reported drop of 1.2 percent.
For the whole first quarter, industrial orders rose by 0.5 percent on the quarter, with bookings from abroad increasing by 2.0 percent and domestic orders falling by 1.3 percent.
STRONG START
The surprisingly strong March figure suggests that industrial output is likely to pick up in the coming months after making a solid start to the year.
"Despite the overcast foreign trade environment, German industry was able to post a noticeable increase in orders from abroad," the Economy Ministry said in a statement, adding it expected industry to continue its moderate growth pace.
Leading economic institutes have said the German economy probably expanded by around 0.6 percent on the quarter in the January-March period - twice as much as in the fourth quarter.
Preliminary data for German gross domestic product (GDP) in the first quarter is due to be published on Friday.
In 2015, the economy grew by 1.7 percent, the strongest rate in four years, driven mainly by strong private consumption and higher state spending on refugees.
It is expected to grow by around the same amount this year, despite slacking exports due to an economic slowdown in China and other emerging markets.