A significant decline in foreign demand is causing German machinery and plant manufacturers to record a drop in orders for the second month in a row.

Orders fell by nine percent in October compared to the same period last year, the industry association VDMA announced on Monday. The three percent increase in domestic orders was unable to compensate for the 14 percent decline in foreign business.

However, VDMA expert Ralph Wiechers warned against overestimating these figures. "The increase in domestic orders is based on an extremely weak comparative basis in the previous year." The development of foreign orders, on the other hand, was distorted by large orders in the comparison period.

In the less volatile three-month period from August to October, incoming orders fell by three percent, the report continued. Domestic business fell by seven percent and foreign business by one percent. For the first ten months of the current year, the decline amounted to a total of eight percent.

Mechanical engineering companies are the backbone of the German economy. The predominantly medium-sized sector, which also includes listed companies such as Thyssenkrupp and Siemens, employs more than one million people.

(Report by Miranda Murray; written by Hakan Ersen, edited by Sabine Wollrab. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)