German industrial orders rose more than expected in October, data showed on Friday, though the increase was driven by large-scale orders and economists said there were no signs of a broader upturn.
Orders rose by 1.5 per cent on the previous month on a seasonally and calendar adjusted basis, the federal statistics office said. A Reuters poll of analysts had pointed to a rise of 0.4 per cent.
The figure was boosted by an 87.1 per cent month-on-month increase under the "other transport equipment" category - which includes ships, aircrafts, trains and military vehicles.
LBBW economist Jens-Oliver Niklasch pointed to a 9.9 per cent increase in domestic orders from the previous month which he said could have been partly driven by government incentives to revive the economy following two years of contraction.
"The German Government's 'investment booster' programme may be having an effect here," he said, referring to a package of measures approved in June including better depreciation options for companies to incentivise investment.
Niklasch said the domestic rise could also be down to rearmament orders, following an increase in defence spending.
In March, Germany’s parliament approved plans for a massive spending surge, including a €500 billion ($582.60 billion) special fund for infrastructure and plans to largely remove defence investment from the rules that cap borrowing.
Excluding big-ticket items, overall new orders were up just 0.5 per cent compared with the previous month, the data showed on Friday. Foreign orders were down four per cent compared with the previous month.
The less-volatile three-month on three-month comparison showed that overall new orders in the period from August to October were 0.5 per cent lower than in the previous three months.
After revision of the provisional data, new orders in September increased by two per cent on August, instead of the preliminary figure of 1.1 per cent.
The revision means that the core indicator for orders continued to move sideways, Ralph Solveen, senior economist at Commerzbank, said. "This suggests that the industry has stabilised, but there are still no signs of an upturn."
(Additional reporting by Simon Ferdinand Eibach, Editing by Miranda Murray and Andrew Heavens)