The German machine-tool sector, a major exporter for Europe's biggest economy, expects output to increase by 3% percent this year, it said on July 21.
The VDMA sector federation had previously expected machine-tool production to stagnate in 2010.
But output grew in April and May for the first time in 15 months, according to a VDMA statement that cited data from the German statistics office Destatis.
Although production in the first five months of 2010 was lower than that of a year earlier, orders have now picked up on average by more than 25%, with foreign demand showing particular strength, the federation said.
The results contrast widely across different branches of the sector however, ranging from decreases of 30% to increases of the same order.
The German economy has rebounded from its worst post-war recession but some economists say the growth cycle may have peaked and they forecast weaker overall economic activity in the second half of the year.
Copyright Agence France-Presse, 2010