Industrial orders, an indicator of future business activity, rose 2.5 percent from a month earlier, statistics office Destatis said.
That beat expectations of just a 0.5 percent rise in a poll of analysts by the financial data platform FactSet.
Destatis also revised up the June reading to an increase of 3.7 percent from its initial 3.1 percent.
"These numbers show that the economic trough seems, for now, to have been overcome," LBBW bank analyst Jens-Oliver Niklasch said.
"It has been a long while since such we have had such positive headlines about the German economy," he added.
A run of brighter-than-expected data has lifted hopes Germany is withstanding the worst of the Middle East war and subsequent soaring energy costs, and gradually emerging from a years-long stagnation.
German investor morale rose strongly in August while business sentiment increased for the third straight month in July.
Several economic institutes upgraded their 2026 growth forecasts this week, predicting the economy would expand by 1.3 to 1.4 percent, substantially higher than just a few months ago.
Chancellor Friedrich Merz has vowed to borrow and spend hundreds of billions of euros in the coming years to boost the economy, which has suffered from weak demand and fierce Chinese competition in key export markets.
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