Growth in Europe's largest economy appeared to be picking up speed after German factory orders expanded for a second month.
Published monthly by the Deutsche Bundesbank, factory orders – which include data on shipments, inventories, and new and unfilled orders – rose 1% month on month. Not as sharp an advance as February's 3.5%, but ahead of market forecasts of 0.8%.
Orders rose at an annual rate of 2.4% after rising 4.7% in the previous month.
Subdued first quarter
The first quarter, however, remained subdued after January's sharp drop of 6.7% – the largest single month decline since January 2009.
Economists said that growth in February and March was driven by an increase in foreign factory orders, showing that the German economy remains largely reliant on foreign demand.
Analysts at Barclays Capital said in a note that the data indicated "the German economy remains highly vulnerable to a slowdown in global trade either through protectionism or weaker demand in Germany’s main export partners, such as China, the UK or the US".
Barclays added, however: "Given strong GDP growth, rising wages and a booming labour market, the German economy should slowly rebalance towards domestic demand, which would help to diversify the economy in the medium term."