German manufacturing orders fell by a larger-than-expected 2.5 per cent in September as foreign purchases of capital goods dipped sharply.
But the government and economists said the outlook for the sector remained robust.
The seasonally adjusted 2.5 per cent month-on-month drop was the biggest since August 2005, according to Bundesbank historical data and well below a Reuters consensus forecast for a decline of 0.8 per cent.
It was driven by a 6.2 per cent slide in foreign orders that resulted from a 10.6 per cent plunge in capital goods purchases from abroad. But on a year-on-year basis, orders were up 9.6 per cent in September and were 3.8 per cent higher in the third quarter than in the second.
The ministry, which confirmed previously reported figures showing an August orders rise of 3.7 per cent, also cautioned against reading too much into the September drop.
Germany posted growth of 0.9 per cent in the second quarter of 2006 - its strongest in over five years. The third quarter is also looking robust, and the economy is widely expected to expand at its best pace since 2000 this year.
The question for many economists, however, is whether Europe's largest economy will slow down dramatically next year, when a three percentage point rise in value-added tax takes effect.