Berlin - German factory orders plunged in September, official data released Thursday showed, as the global financial crisis hits Europe's biggest economy.

The Ministry of Economics and Technology said new orders tumbled by a dramatic 8 per cent month on month in September to record their biggest drop since records began about 17 years ago.

The fall was led by an 11.4-per-cent slump in foreign orders with domestic orders dropping by 4.3 per cent.

Year on year, total new industrial orders declined by 2.7 per cent, the ministry's figures showed.

"The industrialised world is heading for a recession and the German economy is in the middle of the storm," said ING Bank economist Carsten Brzeski.

Economists had predicted the data, which is considered to be a key if volatile economic indicator, to show a more modest 2.3 per cent month-on- month decline in September.

As the world's leading export nation, Germany is seen as vulnerable to a global economic slowdown amid signs that the nation's consumers are also growing worried about the deepening economic gloomy threatening the country.

"Anecdotal evidence of the last weeks shows that the worst is still to come for manufacturers as the latest wave of the financial turmoil in October must have led to a further collapse of new orders," said Brzeski. (dpa)