“Eurozone manufacturing is clearly undergoing another recession. 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% in the final quarter of 2011.
“The survey also points to a strong likelihood of further declines in the first quarter of the new year, with producers cutting back headcounts, inventories and purchasing.
“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. This is particularly evident in Germany, and suggests that operating capacity will be slashed in coming months unless demand revives.”
– Chris Williamson, Chief Economist at Markit
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