BERLIN, March 4 (Reuters) - German engineering orders posted their biggest decline in at least 50 years in January and the sector is unlikely to see firmer demand for some time, engineering industry association VDMA said on Wednesday.
Orders fell by 42 percent on the year in real terms, led downwards by a 47-percent drop in foreign orders, highlighting the impact the global downturn is having on Germany's export-orientated economy.
Domestic orders fell by 31 percent on the year.
"Orders were in record territory going well into the spring of 2008. For this reason alone better news from the engineering sector is likely to remain rare for some time yet," VDMA chief economist Ralph Wiechers said in a statement.
The orders data echoed the grim tone to reports on the health of the German economy, Europe's largest. Business morale, measured by the Ifo institute's business climate index, last month hit its lowest level since reunification in 1990.
As the world's largest exporter of goods, German enjoyed robust foreign demand for its engineering products until the economic downturn took hold last year.
But in the final quarter of 2008, the contribution from foreign trade dragged down German gross domestic product (GDP). This year, the economy faces its deepest recession since World War Two. The government expects it to contract by 2.25 percent.
In the November-January period, engineering orders fell by 38 percent on the year, the VDMA said. The three-month decline was marked by a 39-percent drop in foreign orders, with domestic orders down 34 percent. (Writing by Paul Carrel; Editing by Andy Bruce)