Berlin  - German factory orders fell again in May, the Ministry of Economics and Technology said Friday, dragged down by a sharp drop in domestic demand.

After slumping by 1.7 per cent in April, German industrial orders slipped by a price-and-seasonally adjusted 0.9 per cent in May, adding to expectations that Europe's biggest economy could slow as the year unfolds.

Economists had predicted the data, which is considered to be a key if volatile economic indicator, to clock up a modest 0.6 per cent gain in May.

"Industry orders in the last six months have significantly fallen from what was a high base," the economics ministry said releasing the latest data.

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