The export-oriented German economy, facing headwinds from trade disputes, a cooling global economy and Brexit uncertainty is widely expected to have contracted in the second quarter.

It is being dragged down by the manufacturing sector, which accounts for about a fifth of the economy.

Contracts for 'Made in Germany' goods rose 2.5% from the previous month, the biggest increase since August 2017, the ministry said, driven by an 8.6% increase in demand from non-euro zone countries. That was supported by bookings for big-ticket items.

That beat a Reuters consensus forecast for a 0.5% increase but the ministry said domestic orders fell by 1.0%. Adjusted for big ticket items, orders overall would have fallen by 0.4%.

It also said while the downward trend in industrial orders had slowed noticeably in the second quarter, sentiment indicators pointed to no economic turning point for industry just yet.

"The decent increase in June is good news, but is no cause for immediate celebration. In view of the trade conflicts, humility is required," said Thomas Gitzel, economist at VP Bank.

He added that the decline in domestic orders rather pointed to a recession in Germany.