German factory orders surged in October, bolstering prospects that Europe's largest economy may eke out growth in the final quarter of the year.

The Federal Statistical Office reported on Friday that demand rose 1.5% month-on-month, with September's figure revised sharply upward to 2%. The increase far exceeded the median estimate of 0.3% from a survey.

The improvement was primarily driven by large-scale orders, particularly in the transportation category—including aircraft, ships, trains, and military vehicles—which soared 87%, according to the statistics office.

Industrial recovery is seen as crucial to overcoming economic weakness, as Germany's GDP contracted in both 2023 and 2024. The country's challenges stem from deeper structural issues, including U.S. tariffs, intensifying competition, and persistent bureaucratic hurdles.