German factories see economic recovery picking up as orders rise

German factory orders rose in June, bolstering the recovery in Europe’s largest economy as an easing of pandemic restrictions supported business activity across sectors.

Demand increased 4.1%, beating the median estimate in a Bloomberg survey. The gain was driven by domestic orders, with investment goods up 14.8%.

The report suggests economic momentum will pick up in the coming months, even as supply bottlenecks are straining manufacturers. Rapid recoveries around the world have led to a shortage a raw materials and other inputs as well as slower delivery times.

While carmakers including Volkswagen AG expect logjams to ease, it’s likely to take time. German business confidence unexpectedly slipped in July, signaling concern that supply disruptions and resurgent infections could derail the recovery, a separate report showed last week.

The Bundesbank has said the German economy is on the verge of regaining the ground lost during the pandemic. Industrial production probably increased 0.5% in June, according to a survey before data on Friday.