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BERLIN  Industrial orders in Germany rebounded more strongly than expected in February, a promising sign for first-quarter growth in Europes biggest economy.

The Economy Ministry said Friday that orders increased 2.3 per cent compared with the previous month. That was better than the 1.1 per cent increase economists had expected.

In addition, Januarys figure was revised upward to show a 1.6 per cent decline instead of the original reading of 1.9 per cent.

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Andreas Rees, an economist at UniCredit in Munich, said the figures are the first unambiguous signs of a turnaround in German hard data. He added that it was not only the increase itself but its balanced composition that gave grounds for optimism.

Demand increased across the board in February despite a below-average number of large orders. Orders from other euro area countries rose 1.6 per cent and those from other nations were up 2.7 per cent. There was a 2.2 per cent increase in orders from inside Germany.

The German economy is widely believed to have returned to growth in the first quarter after shrinking by a quarterly rate of 0.6 per cent in the October-December period. That would prevent it from sinking into a recession, commonly defined as two consecutive quarters of economic contraction.

However, figures elsewher showed that the eurozone as a whole is likely to remain in recession when first quarter figures are published next month.

Eurostat, the EUs statistics office, said retail sales dropped by a monthly rate of 0.3 per cent in February. The decline was expected in the markets but contrasts with the 0.9 per cent increase recorded in January.

Eurostat said German retail sales swelled by 0.4 per cent during the month, but that was not enough to make up for a 2.2 per cent decline in France, Europes second-largest economy.