By Gabi Thesing June 7 (Bloomberg) -- German factory orders unexpectedly jumped for a second month in April as the weaker euro boosted export demand and companies increased investment. Orders, adjusted for seasonal swings and inflation, rose 2.8 percent from March, when they surged 5.1 percent, the Economy Ministry in Berlin said today. Economists had forecast a 0.4 percent drop, according to the median of 34 estimates in a Bloomberg News survey. From a year earlier, orders gained 29.6 percent. Europe’s sovereign debt crisis has pushed the euro down 20 percent against the dollar since late November, making exports to countries outside the 16-nation currency bloc more competitive. While budget cuts across the region may crimp economic growth, German factories are ramping up production to meet booming foreign orders and a rebound in domestic investment. “The weaker euro is really kicking in now, and Germany has a dominant position when comes to making the machines that power the global economy,” said Carsten Brzeski, an economist at ING Group in Brussels. “The second quarter will be really strong. European budget tightening will hit German companies later in the year.” The euro rose half a cent after today’s report to $1.1992. March Revision The Economy Ministry revised up the orders increase in March from an initially reported 5 percent. In April, domestic orders climbed 2.9 percent and export sales rose 2.8 percent, driven by a 5.5 percent gain in orders from outside the euro area, the report showed. Demand for goods such as Siemens AG turbines and Daimler AG cars in emerging economies like China is encouraging companies to add workers. The unemployment rate unexpectedly fell to 7.7 percent in May. Daimler’s Mercedes-Benz, the world’s second-biggest luxury- vehicle brand, aims to increase second-quarter sales “substantially” as the high-end E-Class sedan attracted customers in April. Deliveries rose 15 percent from a year earlier to 93,100 cars and sport-utility vehicles, the carmaker said on May 11. While the coldest weather in 14 years suppressed construction over winter, latest reports suggest the economy, Europe’s largest, sprang back to life when building sites reopened with the arrival of spring. The economy will grow 1.6 percent this year after a 5 percent contraction in 2009, the Bundesbank has forecast. Gross domestic product rose 0.2 percent in the first three months of the year. To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net

Source