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PARIS — Euro zone manufacturers met with unexpectedly strong demand for industrial goods in June, a report showed Tuesday, suggesting Germany’s export-driven factories will continue to strengthen output — even as the American economy slows and fears linger that the debt crisis could return to hamper the Continent’s recovery.
Eurostat reported from Luxembourg that industrial new orders in the 16 countries sharing the euro rose 2.5 percent in June from May, and 22.6 percent from June 2009. Excluding the volatile transportation-related sector, orders grew 1.6 percent from May. Demand for capital goods was the largest component of the increase, rising 5.3 percent in June.
Economists surveyed by Bloomberg News had expected overall June orders to rise about 1.5 percent.
The report came as the German government said gross domestic product expanded 2.2 percent in the second quarter from the first quarter, confirming its earlier estimate, showing growth well above its European peers and the fastest pace of expansion since East and West Germany were reunified in 1990.
German exports rose 8.2 percent in the quarter, aided by the 12 percent decline in the euro against the dollar this year. That juggernaut performance helped the overall euro area economy to grow by 1 percent in the second quarter, Eurostat, the European Union’s statistics office, said Aug. 13, the fastest in four years.
“The upswing in Germany has much more solid basis than people thought,” Ralph Solveen, an economist at Commerzbank in Frankfurt, said. Overseas demand is still the main driver, he said, but investment in machinery and equipment has also risen, and even private consumption — which rose 0.6 percent for its first gain in a year — “is looking a little better.”
“There’s a good chance that we’ll see an ongoing recovery of the German economy,” Mr. Solveen said, “but we can’t be sure that will be true for all of Europe.
“And the pace of growth will likely slow, because what we’ve seen was at least partly a countermovement to the sharp drop after the Lehman Brothers shock, which might now run out,” he added, referring to the bankruptcy of the investment bank in September 2008 that is widely thought to have exacerbated the global financial crisis.
In the factory report, Eurostat also revised upward May’s figure to show a 4.1 percent rise from April, compared with the 3.8 percent rise it previously reported.
The data, which are seen as a leading indicator because they refer to orders received but not completed, added to the picture of a relatively solid economy, in line with Markit’s euro zone flash composite purchasing managers’ index Monday that showed services and manufacturing activity at 56.1 in August, down from 56.7 in July, but still above 50, the dividing line between growth and contraction.
The German Federal Statistics Office also reported Tuesday that the government deficit had reached 3.5 percent of G.D.P. in the first six months, above the 3 percent limit dictated by the so-called Maastricht criteria for membership in the euro.
While investors have little doubt that Chancellor Angela Merkel’s government, which projects the deficit will rise to 4.5 percent of G.D.P. this year, can handle its spending, the announcement served as a reminder of the precarious state of public finances across the Continent.
Like other European governments, Germany has said it will move aggressively to cut the gap, even at the risk that doing so will weigh on growth.
The debt concerns, which were partly allayed in May after aggressive intervention by European leaders and by the European Central Bank, have continued to simmer throughout the summer.
The yield on Greek 10-year government bonds has climbed back to around 10.9 percent, despite central bank purchases on the secondary market; that is down from the May 7 peak of 12.4 percent, but shows steady upward movement since their recent low of 6.1 percent on March 17.
German bond yields, on the other hand, fell to new lows. The 10-year bund fell to 2.18 percent from 2.28 Monday.
Mr. Solveen attributed the move to fears that the United States might fall back intorecession and expectations that major central banks would keep rates at ultralow levels for some time.
He said the main risks to the European economy were external, the possibility that Asian growth would slow substantially or that the United States would enter a double-dip recession. While the sovereign debt issue remains on the minds of investors, Mr. Solveen said, it was probable that it would remain subdued for the rest of this year.
One prominent economist, the Nobel laureate Joseph Stiglitz, argued Tuesday in a radio interview that the focus on deficit reduction was exaggeratedly counterproductive.
“Cutting back willy-nilly on high-return investments just to make the picture of the deficit look better is really foolish,” Bloomberg News quoted Mr. Stiglitz as telling RTE radio in Ireland.
“Because so many in Europe are focusing on the 3 percent artificial number, which has no reality and is just looking at one side of a balance sheet, Europe is at risk of going into a double-dip,” Mr. Stiglitz said.
