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Germany's factory orders recovered in May driven by a rebound in foreign demand, but the pace of overall growth was weaker than economists' expectations.

Factory orders grew 1 percent month-on-month in May, reversing a revised 2.2 percent fall in the previous month, data from Destatis showed Thursday. Orders were forecast to climb 1.9 percent.

Excluding major orders, manufacturing new orders declined 0.3 percent in May from the previous month.

Domestic orders fell 1.9 percent from April, while foreign orders grew 3.1 percent. Orders from the euro area climbed 1.7 percent and that from other countries advanced 4 percent.

Manufacturers of intermediate goods reported a 0.7 percent fall compared with April. For consumer goods, a decrease of 2.9 percent was posted. Meanwhile, manufacturers of capital goods showed an increase of 2.6 percent.

Year-on-year, factory orders grew at a faster pace of 3.7 percent in May after rising 3.3 percent in April.

The economy ministry said the solid development in incoming orders, as well as the excellent business climate, support a further slightly upward trend in the manufacturing sector.

Despite the latest monthly growth of 1 percent, order intake of German manufacturing turned out rather disappointing in May, because this plus follows a much larger minus of more than 2 percent in the previous month, Ralph Solveen, an analyst at Commerzbank, said.

Production can hardly be expected to show a significant increase in the coming months, the analyst added.

In contrast, the latest Purchasing Managers' survey from IHS Markit showed that manufacturing new orders grew at the fastest pace since March 2011 in June. However, IHS said growth in new export business slowed from May's seven-year high.

Data showed that manufacturing turnover slid 0.1 percent on a monthly basis, following a 1.3 percent rise in March.

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