Weak demand both at home and abroad drove an unexpected fall in German industrial orders in September, data showed today.

The figures dampened hopes that factories will make a significant contribution to growth in the third quarter. 

Contracts for goods 'Made in Germany' were down by 0.6% on the month, the sharpest fall since April, after increases in the previous two months. 

The reading was well below a Reuters consensus forecast for a rise of 0.3%. 

The economy ministry said the orders figures for the whole third quarter, not just September, were still positive. 

"The brightening of sentiment indicators points to a certain recovery of the industrial sector over the rest of the year," it added. 

But analysts were less optimistic. ING Bank said in a note to clients that the data reflected the reality of a sector that had been weak for almost three years, booking an average monthly growth of 0.1% over the first nine months of this year. 

"The initial relief after the Brexit shock provided by two positive months with increasing new orders has now given room for realism," ING said. "German industry is still running low on fuel." 

Today's figures show that domestic demand fell by 1.1% while foreign orders decreased by 0.3%. Demand from euro zone countries dropped by 4.5%. 

The decrease was driven by weaker demand for capital goods, while orders for consumer and intermediate goods rose slightly. 

The data for August was down to a rise of 0.9% from a previously reported increase of 1%.