Falling domestic and export demand hit Germany's key mechanical engineering sector in December, and 2013 as a whole was a difficult year for the sector, the VDMA industry federation said on Tuesday.

The manufacture of machine tools is an important part of Germany's industrial and export performance.

In December alone, overall incoming orders were down by 6% compared with the level in same month in 2012, VDMA said, with export orders falling by 4% and domestic orders down by 10%.

Taking a three-month comparison to iron out short-term fluctuations, overall orders were down by 3% in the period from October to December, with foreign orders falling by 2% and domestic orders down by 4%.

And for 2013 as a whole, it was a "difficult year for the mechanical engineering sector," with overall orders falling by 2%, VDMA said.

"There was a sharp setback in December both in Germany and in the neighboring eurozone countries," said VDMA's chief economist Ralph Wiechers.

"Data for a single month do not, of course, carry too much weight on their own. But we had hoped for a better end to a difficult year," Wiechers said. "We're now pinning all our hopes on 2014."