In December orders had dropped by 40 percent on a 12-month basis. A breakdown of January's data showed that domestic orders fell by 31 percent from the same month in 2008, while foreign orders were off by 47 percent.
In the three-month period from November to January, orders lost 38 percent from the same period a year earlier, VDMA said.
Looking ahead, a record number of orders posted in early 2008 meant the annual comparison would be worse in coming months, VDMA economist Ralph Wiechers warned.
At the end of 2008, the machine-tool sector employed 975,000 people in Germany, but in December, VDMA estimated that 25,000 posts could be lost this year owing to the economic downturn.
Germany was the world's leading exporter in 2008, but the global slowdown has hit it harder than many other economies. In the final quarter of last year, gross domestic product plunged by 2.1 percent from the previous three-month period, the sharpest contraction since the country was reunited in 1990.
This year, the official forecast currently sees a contraction of between 2.0-2.5 percent, which would be the country's worst slump in six decades.
Business activity has collapsed across the 16-nation eurozone as well, with a widely-watched purchasing manager's index (PMI) compiled by Markit Economics falling in February to its lowest level ever.
"Economic conditions kept deteriorating in the eurozone" in that period, BNP Paribas economist Clemente De Lucia wrote on Wednesday.