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.

While foreign orders edged up by 0.8 per cent in May, German companies' domestic orders contracted by 2.7 per cent.

When the months of April and May are compared with February and March, orders fell 2.5 per cent. (dpa)