German industrial orders fell much more than expected in October on weaker foreign demand for capital goods such as cars, data showed today.

The data further clouds the growth outlook for manufacturers in Europe's largest economy.

A pandemic-related scarcity of microchips and other electronic components has caused massive supply bottlenecks and production problems in Germany's mighty automobile industry and other important sectors of the economy.

Orders for goods 'Made in Germany' dropped 6.9% on the month in seasonally adjusted terms after a revised increase of 1.8% in September, the Federal Statistics Office said.

A Reuters poll of analysts had pointed to a smaller decline of 0.5% on the month.

Excluding distorting factors from rare bookings for large industrial goods such as planes, industrial orders were still down 1.8%, the data showed.

Foreign orders fell more than 13% on the month, with demand from countries outside the euro zone such as China particularly weak. Orders from domestic clients rose 3.4%.

"New lockdowns in Asia are slowing down the industry in Germany," VP Bank analyst Thomas Gitzel said, adding that the current wave of coronavirus infections across the globe was putting a renewed burden on the world economy.

Gitzel added that domestic demand should remain strong, helped by the new ruling coalition's commitment to massive investment in the green economy.

"The decarbonisation of the economy requires major investments in new technologies. German industry can and will benefit from this," Gitzel said.