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After rising consistently for the preceding four months, industrial orders were down 2.8 percent month-on-month in March, the economy ministry said in a statement.
The ministry attributed the March decline to a sharp drop in foreign orders, particularly those coming from the Eurozone.
Overall export orders were down by as much as 4.6 percent with orders from the single currency area nose-diving by 9.4 percent.
The ministry insisted that the overall trend in industrial orders "remains pointing upwards, but is likely to tail off somewhat."
A contributing factor here would be a "temporary reluctance to place orders in view of the current geo-political developments," the ministry suggested.
"All in all, the upturn in the manufacturing sector will be driven by robust domestic demand and demand for industrial goods outside the euro area," it said.
UniCredit analyst Andrea Rees described the March data as an "unpleasant surprise."
While some technical correction had been in the pipeline after persistently upbeat figures in the previous few months, "the drop was massive," Rees said.
But the expert insisted that the March data should not simply be taken at face value.
"A strong positive counter reaction in April is very likely. The upward trend in the German manufacturing sector is intact with some transformation from solid foreign demand to stronger domestic growth forces," Rees said.
Commerzbank economist Ralph Solveen felt that following the previously sharp increases, "German manufacturing seems to be pausing."
He said the data "concurs with our view that the growth rate of real GDP will turn out much weaker in the second quarter than the solid rate of around 0.75 percent which seems to be on the cards for the first quarter."
"Sentiment indicators, however, are still very positive, suggesting that this is a temporary soft patch, but not the end of the upward movement that has been in place since late 2012," Solveen said.
Some of Germany's largest companies urge Merkel not to support US sanctions against Russia - report
Some of Germany's largest companies urged Chancellor Angela Merkel not to support the US initiative to tighten sanctions against Russia, the Wall Street Journal wrote Friday. "The largest companies in Germany, including BASF SE, Siemens AG, Volkswagen AG, Adidas AG and Deutsche Bank AG, openly opposed broader economic sanctions against Russia," the statement said. The companies presented their opinions both privately and publicly, the newspaper stressed.
"If there's a single message we have as business leaders, then it's this: sit down at the negotiating table and resolve these matters peacefully," Wall Street Journal quoted Eckhard Cordes, the head of the Eastern Committee of the German Economy.
West refused to recognize the reunification of Russia and Crimea and therefore imposed sanctions against a number of Russian politicians and businessmen.
The US expanded the sanctions list April 28 in connection with the situation in Ukraine, freezing assets and banning entry for seven Russian citizens and 17 companies.
This list now consists of nearly 50 politicians and businessmen from Russia, including Crimea, as well as from Ukraine.
A The EU has also expanded the sanctions list, adding another 15 people to it.
A group of 19 US Republican senators introduced a bill April 30 to further expand sanctions against Russia.
Moscow has repeatedly warned that talking in the language of sanctions is "inappropriate and counterproductive" and warned its Western partners about the "boomerang effect" that sanctions would have.
Ukraine underwent a regime change on February 22.
The country's parliament ousted President Viktor Yanukovych, changed the constitution and scheduled early presidential elections for May 25.
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