German factory orders rose more than expected in June on the back of strong foreign demand, though orders from eurozone countries dropped for the third month in a row, provisional data from the Federal Statistical Office showed.
New orders grew 2.5% month over month in June, after price, seasonal and calendar adjustments, following a revised 2.0% decline in May.
June's rebound was higher than the Econoday consensus estimate of a 0.6% monthly rise.
Domestic orders fell 1.0% and foreign orders increased 5.0%. New orders from the euro area dropped 0.6% and those from other countries increased 8.6%.
Compared to a year ago, new orders fell 3.6% in June after price and calendar adjustments.
"The continued weakening of demand from other eurozone countries suggests that the biggest problem for German industry might not be the weaker global economy but rather a new weakening of the eurozone," wrote Carsten Brzeski, chief economist at ING Germany.
Signs of eurozone weakness "will clearly ring more alarm bells at the European Central Bank," which recently hinted at more stimulus measures to spur growth across the eurozone.