Weak demand from domestic and euro zone clients led to a fourth monthly drop in a row in German industrial orders in April.

The figures suggest that factories in Europe's largest economy will shift into a lower gear over coming months. 

Contracts for German goods were down 2.5% from March after a downwardly revised drop of 1.1% the previous month, the Federal Statistics Office data showed. 

The April reading significantly undershot a Reuters poll of analysts, who had predicted a 0.8% rise. 

The decline was driven by a drop in domestic demand, though orders from clients in other euro zone countries also fell. 

A sector breakdown of the figures showed demand for capital and consumer goods fell while demand for intermediate goods rose. 

The release followed a string of strong economic data that included retail sales posting a bigger-than-expected jump in April, unemployment reaching a record low in May and business morale steadying despite the threat of a global trade war.

Germany's VDMA industry association said earlier this week that engineering orders had jumped 12% in April compared to a year before, with surging domestic demand offsetting a drop in contracts from euro zone partners. 

The German economy grew 0.3% on the quarter in the first three months of the year and is expected to pick up speed in the April-June period. 

For 2018 as a whole, the German government is forecasting 2.3% growth.