German industrial orders increased sharply in June on the back of domestic demand after falling in May for the first time this year on renewed pandemic fears, official data showed on Thursday. Orders were up 4.1 percent, according to the federal statistics office Destatis, far outstripping expectations of analysts surveyed by Factset and Bloomberg who had forecasted growth of between 1.6 and 2.0 percent. Orders were up significantly on last year, coming in 26.2 percent higher than in June 2020. Domestic orders drove the significant increase in the overall indicator, Destatis said. These were up 9.6 percent compared with the previous month, with large orders for capital goods like machineries bulking up the entry. Demand from outside Germany were also slightly up by 0.4 percent overall. Within the Eurozone demand was stronger, with the increase at 1.3 percent, while outside the Eurozone the growth was at a muted 0.2 percent, after a difficult month of May in which orders plunged by 9.3 percent. Industrial orders are closely watched as a key indicator of future economic activity, especially in manufacturing powerhouse Germany.