German industry orders rose far more than forecast in October.

Although the Bundesbank dampened the mood by cutting its growth forecasts for Europe's largest economy, its president said there were signs current weakness would soon be overcome.

German industrial orders surged by 2.5% on the month in October thanks to strong domestic demand while foreign appetite was moderate, data from the Economy Ministry showed today. 

That exceeded by far a consensus forecast for a 0.5% gain and overshot the highest estimate for a 1.9% increase. 

But Germany's Bundesbank today halved its 2015 growth forecast for Germany to 1% and also cut its estimate for this year to 1.4% from a forecast of 1.9% made in June.

It also trimmed its prediction for 2016 to 1.6%. 

"However, there is reason to hope that the current sluggish phase will prove to be short-lived," Bundesbank President Jens Weidmann said in a statement, adding that opportunities abroad would likely increase again next year. 

He also said that if crude oil prices remained subdued for a longer period, gross domestic product (GDP) could expand by an additional 0.1-0.2 percentage points in both 2015 and 2016. 

The German economy was a bastion of growth until 2011 but has since then slowed as weak investment and sluggish foreign trade have taken their toll. It only just escaped a recession in the third quarter of this year with 0.1% growth. 

But economists were upbeat about the growth outlook after the orders data. 

They said the strong rise, combined with an upwardly revised 1.1% increase in industry contracts in September, suggested the economy had stabilised after a sluggish summer. 

Forward-looking sentiment indicators have improved recently, with business and investment morale both breaking long runs of declines to head north in November and consumer confidence has also picked up.