German manufacturers booked fewer orders in February than in January, the sixth month in a row that the global recession hammered Europe’s largest economy, which relies on demand for its engineering products to sustain growth.

The trend signalled the German economy probably shrank more in the first quarter of 2009 than in the last quarter of 2008, keeping the pressure on the European Central Bank to cut rates and stimulate the growth using other measures.

Order volumes declined 3.5 per cent in the second month of the year, the German trade and industry ministry said, a gentler decline than the 6.7 per cent drop recorded in January, but still a faster rate than many economists predicted.

”The worse-than-expected numbers show the recession is in full swing,” said Ralph Solveen at Commerzbank. He said gross domestic product probably shrank by 3.5 per cent in the first quarter, after losing 2.1 per cent the quarter before.

He said order entry, 38.2 per cent below levels seen in February 2008, indicated that production would “fall significantly” in the next months - raising the pressure on companies to lay off staff and driving the jobless rate sharply higher.

This looks set to raise pressure on the European Central Bank. It surprised markets last week by cutting its main interest rate by only 25 basis points to 1.25 percent. Most had expected it to go as low a 1 per cent given gloomy prospects.

The ECB has held out the possibility of another rate cut, and some monetary policy makers have suggested it might follow the lead of the US Federal Reserve and the Bank of England in taking more unconventional steps to fight the crisis.

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