Wiesbaden (dpa) - A ray of hope for the ailing industry in Germany: In June, the sector received more orders for the first time this year. Incoming orders increased by 3.9 percent compared to the previous month, according to the Federal Statistical Office. Prior to this, incoming orders in industrial companies had fallen for five months in a row.

Analysts had expected a recovery in incoming orders. On average, however, they had assumed a significantly lower increase of 0.5 percent. In a year-on-year comparison, significantly fewer new orders were recorded. The Federal Office reported a decline of 11.8 percent in this view. Excluding large orders, total orders would have risen by 3.3 percent month-on-month, it added.

More demand from the domestic market

The main reason for the growth in June was significantly stronger domestic demand. According to the Federal Ministry of Economics, orders here rose sharply by 9.1%. Demand from abroad also developed better, but only increased slightly. Orders from abroad increased by 0.4 percent.

Orders in the important sectors of mechanical engineering, motor vehicles and motor vehicle parts, metal products and other vehicle construction rose sharply in some cases, according to the ministry's statement. In contrast, incoming orders fell in the metal production and processing sector and in the pharmaceutical industry, among others.

"Downward trend not yet broken"

The latest development in domestic orders, together with the latest survey results from the European Central Bank (ECB), could indicate "increased investment intentions and a recovery in capital investment in the second half of the year", commented experts from the ministry. "However, a broader revival of the industrial economy is unlikely for the time being in view of the continued subdued mood in companies and the still weak foreign demand."

"The good news is still out there," said Jens-Oliver Niklasch, analyst at Landesbank Baden-Württemberg. However, more would have to come together for the industry to really gain confidence. "The downward trend has not been broken."