The poor figures came hard on the heels of statistics showing that industrial production in western Germany also fell 1.5 per cent in June from May after allowing for inflation and seasonal factors.
Industrial orders in June were down 6.6 per cent year-on-year. June orders in the key investment goods sector fell by 4 per cent from May.
The Bundesbank and the Bonn government had been quick to seize on better production and order figures in May as indicating that the bottom of the recession had been reached and an upturn was not far away.
In its monthly report, to be published today, the IFO research institute in Munich says that western German production will rise very moderately in the second half of 1993.
But it says the region's economy will not experience a lasting upturn until after the first quarter of 1994 and there remains the danger of a setback early next year.
'A combination of planned increases in taxation and social insurance contributions and lower unemployment benefits mean that consumers have a hard time ahead of them in 1994 as well,' the IFO report says.
Nevertheless, the German stock exchange continued to perform strongly, boosted by hopes of lower interest rates once the Bundesbank resumes business at the end of August. The DAX index closed 17.13 points higher at 1,860.56.
Otmar Issing, the Bundesbank's chief economist, joined the chorus of officials seeking to calm worries that an appreciating mark will devastate Germany's export prospects. He described such excessive fears as unfounded.
He told the Handelsblatt newspaper that only a quarter of German exports would be affected by currency changes. The Netherlands, Britain and Italy would not be affected, he said, adding that it was not inevitable that the wider exchange rate mechanism bands would lead to more instability among European currencies.Reuse content