Eurozone manufacturing 'stuck in reverse'

The eurozone manufacturing sector was in reverse for the fifth month in a row in December due to fewer orders, a global economic slowdown and financial market upheaval, a key survey showed Monday. With recession looming in 2012 across the 17-nation bloc, every state recorded drops in production for the second month running, according to the purchasing managers' index (PMI) compiled by Markit research firm. "Eurozone manufacturing is clearly undergoing another recession," said Markit chief economist Chris Williamson. The PMI, a closely-watched survey of 3,000 manufacturing firms, hit 46.9 points in December, slightly up from 46.4 points in November, when it reached a 28-month low. Any score below 50 indicates contraction. "Despite the rate of decline easing slightly in December, production appears to have been collapsing across the single currency area at a quarterly rate of approximately 1.5 percent in the final quarter of 2011," Williamson said. The survey indicates a strong likelihood for further declines in the first quarter of the year, he added. "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," Williamson said. While Germany, France, the Netherlands and Austria experienced mild falls in output, three nations in financial trouble, Italy, Spain and Greece, faced steeper declines.