Berlin - German business confidence plunged to near a 16-year low in November, a key survey released Monday said, amid signs that growth in Europe's biggest economy is rapidly losing momentum.

With the deepening global economic gloom threatening Germany's key export machine, the nation's closely watched Ifo business confidence index dropped more than expected to 85.8 points this month from 90.2 points last month. The Ifo now stands at its lowest level since February 1993.

It was also the sixth consecutive monthly fall in the Ifo index, which is likely to set the stage for the release this week of another round of bleak economic surveys from the 15-member eurozone.

Analysts had predicted that the German business confidence index, which is drawn up by the Munich-based Ifo economic institute, would fall to 88.7 points.

Moreover, analysts believe that the worse is still to come for the German economy with lay offs and cutbacks in hiring now looming large over the nation.

This in turn is likely to add to the pressure on the European Central Bank to follow up the recent hefty cuts delivered by other central banks around the world and slash rates again at its meeting next week.

"It seems as if a wildfire is running through the German economy at an enormous speed," said ING Bank economist Carsten Brzeski.

"Further drops in new orders, bad news from the German automobile industry and a general climate of high uncertainty, all bode ill for the months ahead," he said.

Month-on-month eurozone factory orders tumbled by 3.9 per cent in September, data released Monday by the European Commission's statistics office showed.

Figures published this month showed the German economy having tipped into recession with growth shrinking by a bigger-than-forecast 0.5 per cent during the third quarter, on top of a 0.4-per-cent contraction in the second quarter.

Germany's influential central bank the Bundesbank is expected to warn in a report to be released next week that the nation faces its worst recession since 1949 with economic growth shrinking by 1 per cent in 2009.

After plummeting to a record low in October, the Ifo index measuring business expectations for six months down the track slumped again from 81.4 to 77.6, while the component gauging German executives assessment of the current business conditions economy fell to 94.8, from 99.9 in October.

Releasing the index, which is based on a survey of 7,000 German executives, Ifo President Hans-Werner Sinn predicted that the report could help to mark the end of the long-running monthly falls in the nation's unemployment rate.

Germany's key car industry could be poised to axe up to 60,000 jobs in the coming months, the German Automobile Economy Institute warned last week.

"On the whole the economic downturn has worsened and will now have an impact on the labour market," Sinn said. "The export business is expected to weaken at an accelerated pace and plans call for reductions in staff," he said.