German factory orders rebounded partially in August, a sign that the country’s crucial manufacturing sector may be stabilizing as it suffers from a global economic slowdown and higher interest rates.

Demand increased 3.9%, more than economists had estimated in a Bloomberg survey. Friday’s data come after a revised 11.3% drop the previous month that was largely due to major orders.

Statistics officials said that the August’s gain was primarily due to computer, electronic and optical products.

Germany’s economy has emerged as the euro zone’s biggest weak spot, with output projected to shrink this year due to waning demand for goods and services. Strongly reliant on global trade, the country has been hit hard by tighter monetary policy and slower expansion abroad, clouding its longer-term prospects.

Exports dropped by 1.2% in August, more than economists had anticipated, figures released Thursday showed. The Bundesbank has said output may have fallen again in the third quarter, though economists expect a rebound next year on the back of rising wages and slower inflation.

German manufacturers are also facing a slew of deeper challenges. The war in Ukraine means they can no longer rely on Russia for cheap energy, while an aging workforce is making it harder to find staff and dependence on China has proved costly.

The German economy “been hit twice: by the energy price shock and slower growth in China,” European Central Bank Executive Board member Isabel Schnabel told Jutarnji list in an interview.

Still, she expressed hope that the Europe’s largest economy will be able to overcome its current struggles, as it did previously.

“Germany managed to transform itself in the past and I am convinced that it will be able to do so today,” she said. “The green transition offers Germany great opportunities to regain its technological leadership. The economy will strengthen over time, but a key question remains over long-term potential growth, which largely depends on how Germany deals with its structural challenges.”

--With assistance from Joel Rinneby.

(Updates with Schnabel in seventh paragraph.)