Companies within the single currency faced declining order inflows, a slowing global economy and ongoing financial market turbulence, according to the latest PMI figures.
At 46.9 in December, the Markit Eurozone Manufacturing PMI was up marginally from November’s 28-month low of 46.4, signaling a slight easing in the overall rate of contraction.
However, the figure is still significantly below the 50 mark that represents growth and makes Q4 the weakest average PMI reading in since the second quarter of 2009.
For the second consecutive month, all of the nations within the single currency reported lower levels of output.
The figures come as the UK’s PMI results showed that output had continued to contract, but at a slower rate than these figures in the Eurozone economies. The latest results from Markit show that a figure of 49.6 for manufacturing output in December, compared to 47.7 in November.
Rates of contraction for production eased across all of the nations covered, although marked disparities persisted within the Eurozone survey. Germany, France, the Netherlands and Austria saw only mild falls, while marked contractions were seen in Italy, Spain and Greece.
The rates of decline in both total new orders and new export orders were less of a decrease than in November but remained severe.
In all countries covered, the contractions in both new orders and new export orders were steep as Greece, Italy and Spain saw the steepest overall falls in new orders.
Chris Williamson, chief economist at Markit declared that “Eurozone manufacturing is clearly undergoing another recession.” Mr Williamson predicted a grim start to 2012 within the Eurozone and further cuts in output after a collapse in production at a quarterly rate of approximately 1.5% in the final quarter of 2011.
“The survey points to a strong likelihood of further declines in the first quarter of the new year, with producers cutting back headcounts, inventories and purchasing,” he said.
“Worryingly, new orders are falling at a far faster rate than manufacturers have been cutting output, meaning firms have been reliant on orders placed earlier in the year to sustain current production levels.”
