Germany's factory orders rose 1.9% mom in May 2026, rebounding from a downwardly revised 3.2% drop in April and beating market estimates for a 1.2% gain. The recovery was driven mainly by a surge in large-scale orders for aircraft, ships, trains, and military vehicles, which jumped 85.0%. Orders also grew for electrical equipment (5.7%) and mechanical engineering (3.7%). However, demand fell in the automotive industry (-3.8%) and data processing, electronic, and optical products (-7.8%). Orders rose for capital goods (2.2%), consumer goods (2.4%), and intermediate goods (1.4%). Foreign demand gained 2.2%, supported by an 11.2% surge in orders from the euro area, while orders from non-euro area countries fell 3.2%. Domestic orders also went up 1.3%. Excluding large-scale contracts, orders still rose a solid 1.0%. However, on a less volatile three-month basis, new orders in March-May eased 0.2% from the prior three months, though they were up 4.1% when large orders were excluded.