BERLIN (Reuters) - German industrial orders rose again in March, confounding expectations for a drop after strong demand from the euro zone provided a boost, the Economy Ministry said on Tuesday, adding that the sector was slowly pulling out of a weak phase.
Seasonally and price-adjusted data showed industrial orders rising by 2.2 percent in March from the previous month, the same as an upwardly revised increase posted in February.
Economists in a Reuters poll had expected orders to drop by 0.5 percent in March.
"The recovery is on its way. We have had two consecutive strong increases now. Industry has left the worst behind it but industrial production may still have shrunk in the first quarter," said Rainer Sartoris of HSBC Trinkaus.
Foreign orders rose by 2.7 percent, with a boost from countries in the recession-hit euro zone, where orders rose by 4.2 percent. Domestic orders picked up by 1.8 percent.
"German industry seems to be overcoming its weak phase slowly. The significant increase in orders brings the quarter as a whole to a slight plus of 0.4 percent," the ministry said in a statement.
Germany's economy was long resilient to the euro zone debt crisis, but it contracted at the end of last year. Economists, however, expect it to avoid recession and to have returned to weak growth in the first quarter.
(Reporting by Annika Breidthardt, editing by Gareth Jones)