Euro zone manufacturing put in its worst performance in the three months to September since the depths of the Great Recession, with factories hit by falling demand despite cutting prices, a business survey showed on Monday -- pointing to a new recession.
Factories helped lift the 17-nation bloc out of its last recession but the survey suggests a downturn that began in smaller periphery countries has taken root in core members Germany and France.
"Despite seeing some easing in the rate of decline last month, manufacturers across the euro area suffered the worst quarter for three years in the three months to September," said Chris Williamson, chief economist at data collator Markit.
"The sector will act as a severe drag on economic growth. It therefore seems inevitable that the region will have fallen back into a new recession in the third quarter."
Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) rose to 46.1 in September from 45.1 in August and above the preliminary reading of 46.0. But that was its 14th month below the 50 mark that divides growth from contraction.
The output index rose to 45.9 from August's 44.4 but chalked up its seventh month of decline.
The euro zone escaped from the last recession in 2009 but a debt crisis that began in Greece almost three years ago has wreaked havoc across the region and threatened to bring the whole currency union crashing down.
Read more: http://www.reuters.com/article/2012/10/01/us-poll-euro-zone-sept-factory-data-flag-idUSBRE89008720121001
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