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

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 per cent 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 economist Carsten Brzeski wrote in the note. “German industry is still running low on fuel.”

He added: “It is hard to see how German industry can shift to a higher gear. Against this background, the optimism reflected in surging confidence indicators is in our view striking.”

Domestic demand fell by 1.1 per cent while foreign orders decreased by 0.3 per cent. Demand from eurozone countries dropped by 4.5 per cent.

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