German industrial orders fell far more than expected in May, and the Economy Ministry warned today that this sector of Europe's largest economy was likely to remain weak in the coming months. 

Contracts for 'Made in Germany' goods were down by 2.2% on the month after rising slightly in March and April, data from the Economy Ministry showed.  

The reading undershot the Reuters consensus forecast for a 0.1% decline. 

"The great order book deflation continues," ING economist Carsten Brzeski said. Devastating new orders data just undermined any hopes for an industrial rebound." 

Other recent data have painted a gloomy picture of the German sector too, with engineering orders falling and activity in the manufacturing sector contracting. 

In a sign that the economic slowdown is beginning to bite, a survey by the Ifo institute published this week showed German manufacturers expect to make more use of "Kurzarbeit" - a short-hours facility aimed at avoiding mass lay-offs. 

A breakdown of the data showed foreign contracts dropping by 4.3%, driven by a strong decline in demand from non-euro zone countries. 

The DIHK Chambers of Industry and Commerce this week more than halved its forecast for export growth this year, to 1%.

The VDMA engineering body also said retaliatory tariffs on imported goods imposed by the US and China would contribute to a 2% decline in production this year. 

Trade conflicts, Britain's expected departure from the EU and a cooling global economic outlook are causing headaches for Germany, which for many years relied on exports for growth but has come to depend increasingly on private consumption. 

Now its 10th year of expansion, the German economy returned to growth between January and March, posting a 0.4% expansion, but the Bundesbank expects a small contraction in the second quarter.