Euro zone industrial new orders were much stronger than expected in April, the European Union's statistics office Eurostat said.
New orders in the 15 countries sharing the euro jumped 2.5 per cent month-on-month for an 11.7 per cent year-on-year rise.
Economists had expected a 0.6 monthly decline and a 1.5 per cent annual gain. Eurostat revised down its data for March to a 1.2 per cent monthly fall and a 3.7 per cent annual decline.
"The data is likely to reinforce the ECB's belief that the euro zone's economy is fundamentally sound and that it can press ahead with raising its key interest rate from 4 per cent to 4.25 per cent at its 3 July meeting to try to ensure that current elevated inflationary levels and pressures are not sustained over the medium term," said Howard Archer, economist at Global Insight.
Excluding the volatile orders for ships, trains and planes, orders in April rose 2.2 per cent month-on-month and 11.8 per cent year-on-year.
New orders are an indication of future industrial production and therefore overall economic activity, which in turn may impact the monetary policy of the European Central Bank.
The ECB, which wants annual inflation to be just below 2 per cent, signalled it may raise interest rates by a small amount on July 3rd from 4 per cent to anchor inflation expectations after consumer price gains hit a record 3.7 per cent in May.
Mr Archer said however, the data should not be over-interpreted, because it was notoriously volatile.
"Furthermore, the euro zone manufacturing purchasing managers' survey for June indicated that activity contracted for the first time since mid-2005, with new orders at a 60-month low, backlogs of work contracting and output declining," he said.
"Robust industrial orders growth in April therefore does not significantly undermine our belief that the euro zone manufacturing sector is struggling in the face of a very strong euro, muted consumer spending, softer growth in key export markets, elevated oil and commodity prices and tighter lending conditions," he said.