(Photo: Opel)

BERLIN — German factory orders rebounded more than expected in January, driven by demand from outside the 18 countries using the euro.

The Federal Statistical Office said Thursday that orders were up 1.2 per cent over December, when adjusted for price, calendar and seasonal factors. Analysts had predicted a 0.9 per cent gain.

The office also says it revised the previous months decline of 0.5 per cent to a decline of only 0.2 per cent.

Domestic orders increased 1.6 per cent, while foreign orders overall rose 1 per cent. Non-eurozone orders rose 7.2 per cent, but orders from within the bloc dropped 8.8 per cent.

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ING economist Carsten Brzeski says the numbers send two important messages — that the near-term looks positive with industrial production gaining momentum, but that in the long term Germany needs greater domestic demand.