Higher foreign demand caused a larger-than-expected increase in German industrial orders in November, according to data released on Thursday, providing rare good news for manufacturers in Europe's largest economy who are struggling from supply bottlenecks and labour shortages.

Orders for 'Made in Germany' goods increased 3.7% MoM in seasonally adjusted terms, following a revised fall of 5.8% in October, according to data from the Federal Statistics Office.

Foreign demand for capital and intermediate goods drove the increase, with orders from other Eurozone countries up 13.1% and bookings from clients outside the single currency bloc rising 5%.

German economy ministry says that economic impact of coronavirus cannot be  estimated at the moment

"This provides a good boost for the economic outlook," the economy ministry said, "albeit economic activity remains hindered by existing delivery bottlenecks."

Unlike in prior months, orders for large-ticket items such as planes had no impact on the headline figure in November. Excluding these unique factors, industrial orders increased 3.8% MoM, according to the ministry.

"The improvement in overseas business is particularly encouraging, especially because delivery bottlenecks appear to be easing," said Alexander Krueger, an analyst at private bank Hauck Aufhaeuser Lampe.

However, Krueger warned that supply chain issues would most likely persist and that it could take many months before delivery operations functioned more smoothly again.