That was the result of a survey published on Monday by the Markit Institute.
Demand is sinking particularly in recession-plagued southern European countries, the survey of 500 German firms found, but even China is reportedly struggling against the worldwide economic downturn.
The survey reported that German exports to Portugal sank by 14.3 percent in the first half of this year, while exports to Greece and Spain sank by more than nine percent.
Orders for manufacturing machines, raw materials and other producer goods were particularly affected.
And there is little room for improvement, at least in the short term, the report found, as more and more German companies lay people off.
“Despite slowing the decline, German industry faces its worst quarter in more than three years this third quarter,” Markit economist Tim Moore told Reuters news agency.
Economists now fear that Germany’s gross domestic product could sink in the coming year.