Frank Augstein,file, Associated Press
FILE - In this Jan. 9, 2009 file photo is an aerial view of the steel company ThyssenKrupp in Duisburg, western Germany. The Economy Ministry said Monday, Feb 7, 2011 German industrial orders fell an unexpectedly high 3.4 percent in December over the previous month, pulled down by a large drop in demand for capital goods from non-eurozone countries.

BERLIN — German industrial orders fell an unexpectedly sharp 3.4 percent during December, due mainly to a large drop in demand for capital goods from non-eurozone countries, the Economy Ministry reported Monday.

Domestic industrial orders in December dropped 2.4 percent when adjusted for price changes and seasonal factors, while foreign orders dropped 4.2 percent.

Orders from within the eurozone rose 3.7 percent, however, while outside the 17-nation bloc they fell 8.9 percent, the ministry said.

The drop followed a robust 5.2 percent overall rise in industrial orders in November over the previous month, and ING economist Carsten Brzeski said it was partially an expected correction.

"Today's drop is mainly a reversal of the November surge, which was driven by several one-off factors: some big-ticket orders from abroad and the fact that domestic orders benefited from the expiration of the declining balance depreciation option which brought forward investment in capital goods," he said in a research note.

The Economy Ministry noted that the combined November/December period showed an adjusted rise in orders of 4.4 percent over the September/October period.

Germany's economic recovery has made it a standout among the 17 countries that use the euro currency.

The central bank has forecast the economy will grow by 3.6 percent in 2010 and 2 percent this year. The number of jobless, meanwhile, has fallen to about 3 million.

Even with the drop over November, orders in December were up 22.3 percent compared with a year earlier, when the financial crisis had plunged the country into its deepest postwar recession.

Brzeski noted the rise in eurozone orders in December as a good sign, showing that despite fiscal austerity in the bloc there is still robust demand for German goods.

"Looking ahead, the strong momentum of new orders of the last two years should normalize in the coming months," he said. "However, the positive trend is unlikely to reverse. With a pickup in domestic investment and the strengthening of the U.S. economy, the German industry should get enough fuel to continue running smoothly."