Frankfurt - World demand for machinery is slumping fast, according to Germany's VDMA federation of machinery and plant builders in Frankfurt Wednesday.

In the latest sign of recession, it said orders from abroad in August were down 19 per cent in price-neutral terms compared to one year before. Domestic orders rose 6 per cent in the same period.

The industry, a key to German prosperity, saw combined orders decline 10 per cent.

VDMA senior economist Ralph Wiechers cautioned that a few big orders had distorted the picture, but said the overall trend was clearly downwards.

Federal German statisticians in Wiesbaden meanwhile reported an August slump in retail sales of 3 per cent in real terms compared to one year earlier.

They said the biggest drops had been in the grocery trade, but cautioned that the figures were not quite comparable, since August this year had one less shopping day in it than August of 2007. (dpa)