By Mucahithan Avcıoglu

ISTANBUL (AA) — The downturn in the eurozone manufacturing sector deepened in December as it ended the year in contraction in most of the indexes, according to a report released on Thursday.

The eurozone manufacturing purchasing managers index (PMI) fell to its lowest level in three months at 45.1 in December, continuing its two-and-a-half years of decline trend.

New orders, output, purchasing activity and inventories of inputs all fell in December.

Concerning the PMI data, Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: “New orders have dropped even more than in the previous two months, crushing any hopes for a quick recovery. This view is backed by the accelerated decline in order backlogs.

“A sign of the industry's recovery will be when companies start rebuilding their inventories of intermediate goods, but December showed no signs of this happening."

He added that instead, inventories were reduced at a very fast rate again; companies also sped up the depletion of their finished goods inventories, clearly expecting continued weak demand.

On the other hand, business confidence saw a modest improvement as growth expectations hit a four-month high.