Official figures show that German industrial orders recorded a surprise 4.4% monthly rise in May. But the economy ministry said orders for industrial goods in the biggest European economy were still down by 29.4% over 12 months.
The ministry revised the monthly figure for April to a slight rise of 0.1% from a previous estimate of no change, meaning that industrial orders, a key indicator of future output, have now risen for three months running.
The fragile car sector turned in a strong performance while formerly weak orders from outside the euro zone jumped by 8.2% on the month. That was good news for Germany's export-oriented economy, which is in its worst recession since World War II.
'The perspective of a broad stabilisation in industrial production has been reinforced' by the data, the ministry said.
The government expects the economy to contract by 6% this year after industrial activity collapsed in the wake of US investment bank Lehman Brother's failure in September 2008.
Bundesbank chief rejects direct lending idea
German central bank chief Axel Weber has said he and his euro zone counterparts do not need to extend credit directly to companies, rejecting an idea proposed by German finance minister Peer Steinbruck earlier.
'The Bundesbank sees no need for that,' Weber said in an unusual statement issued directly by the German central bank.
Such measures had not been discussed by the European Central Bank's (ECB) governing council, of which Weber is a key member, and would become an issue only if the euro zone banking system became dysfunctional, he said. Weber added that Germany was not gripped by a credit crunch.
The comments came after Steinbruck said in Brussels that the government and Bundesbank might provide credit directly to the private sector, bypassing banks which have been accused of restricting lending.
