New contracts were down 2.6 percent month-on-month as the year started, statistics authority Destatis said in seasonally-adjusted figures.

That was well short of the modest 0.5 percent increase forecast by analysts surveyed by Factset.

But the effect was slightly compensated by dramatically revised figures for December, which showed a 0.9-percent increase in orders where intially the statisticians reported of -1.6 percent, as a number of large contracts were reported late.

The "present ebbing in orders is a sign of a continuing economic slowdown in industry at the start of the year," the economy ministry in Berlin acknowledged.

The ministry also noted that the fall was less marked in a two-month comparison, with orders in December-January 0.5 percent below those in October-November.

Recent months have seen high volatility in orders data as uncertainty over trade tensions and a possible no-deal British exit from the European Union, weakness in important emerging markets like China and a slowdown in economic growth have made themselves felt.

January's data were weighed down by a 4.2-percent reduction in orders from outside the 19-nation eurozone and a 2.6-percent fall in business from Germany's neighbours in the currency bloc.

Meanwhile domestic demand also fell back, by 1.2 percent.

And looking to different industrial sectors, makers of producer, consumer and capital goods all reported fewer new contracts.

"We need to put the drop (in January) into perspective," Berenberg bank economist Florian Hense commented, highlighting the December revision, higher industrial sales and a 5.7-month backlog of orders.

But "it will take some easing of trade tensions, better news out of China and an end to the hard Brexit risk to stop the downturn," he predicted.