Germany’s exports rebounded at a faster-than-expected pace in March, while industrial orders declined unexpectedly on weak domestic demand, pouring cold water on hopes of better economic recovery.

Exports gained 0.9 percent on a monthly basis, reversing a 1.6 percent fall in February, which was revised from a 0.2 percent gain reported initially, Destatis said Tuesday. Shipments were forecast to climb 0.4 percent.

At the same time, the monthly increase in imports eased to 0.3 percent from 3.0 percent in the previous month. Nonetheless, the outcome was better than the expected 1.0 percent decrease.

As a result, the trade surplus increased to EUR 22.3 billion in March from EUR 21.4 billion in the previous month. The surplus was slightly below economists’ forecast of EUR 22.4 billion.

On a yearly basis, exports declined 8.3 percent after a 1.1 percent decrease. Likewise, the fall in imports deepened to 9.6 percent from 6.7 percent.

Another report showed that factory orders decreased 0.4 percent on a monthly basis, confounding expectations for an increase of 0.4 percent. Nonetheless, the pace of decrease slowed from the revised 0.8 percent drop logged in February.

New orders for capital goods and intermediate goods were down 0.4 percent each. Meanwhile, the consumer goods sector reported an increase of 0.7 percent.

Foreign orders grew 2.0 percent driven by the 10.6 percent surge in demand from the euro area. By contrast, orders from the non-euro area dropped 2.9 percent.

At the same time, domestic orders declined 3.6 percent from the prior month.

On a yearly basis, the decline in factory orders slowed to 1.9 percent from 8.8 percent in the previous month.

ING economist Carsten Brzeski said the data confirmed the return of the export-driven German growth model. However, industrial orders remained weak suggesting that this return will be short-lived, he noted.

Official data confirmed that the German economy avoided a recession in the first quarter on exports and investment in construction. Gross domestic product grew 0.2 percent following a 0.5 percent fall a quarter ago.

Elsewhere, the Purchasing Managers’ survey results showed that the downturn in the German construction sector extended into April.

The S&P Global/HCOB construction Purchasing Managers’ Index fell to 37.5 from 38.3 in March. A score below 50.0 indicates contraction in the sector.