Factories registered a 0.4 percent drop in orders. November's reading from the Federal Statistics Office confounded expectations in a Reuters poll for a 0.5 percent rise.

The data also showed that contracts for 'Made in Germany' goods climbed by a revised 0.7 percent in October, an upward revision from a previously reported rise of 0.5 percent.

The Economy Ministry, detailing the figures, said the fall in November was due to fluctuations in large orders but added that the trend remained firmly upwards.

"Overall, orders in the second half of 2017 developed extremely dynamically. This lays the foundation for a strong start to the year in industry," the ministry added.

A breakdown of the data showed domestic orders fell by 0.4 percent on the month and foreign orders by 0.5 percent.

'DON'T GET CONCERNED'

ING economist Carsten Brzeski said the overall fall "is rather of a technical nature than any sign of weakness.

"With inventories low and capacity utilization at its highest level since 2008, there is little reason to get concerned," he added. "The general trend for industrial production in Germany remains positive."

Germany is enjoying strong domestic demand helped by record-high employment, rising real wages and low borrowing costs while its exporters are benefiting from a global economic recovery.

Last month, the Ifo economic institute said the German economy will expand by 2.6 percent in 2018, pointing to a broad upswing that is generating employment and buoyant tax revenues.

On Friday, official data showed retail sales surged more than expected in November and were estimated to have risen sharply in 2017 overall, supporting the view that private consumption helped growth in Germany last year.

(Reporting by Joseph Nasr and Paul Carrel; Editing by Robin Pomeroy and Peter Graff)