BRUSSELS: The eurozone manufacturing sector experienced a deeper downturn in December, closing the year with most indexes showing contraction, according to a report released on Thursday. The manufacturing purchasing managers index (PMI) for the eurozone fell to a three-month low of 45.1, marking a continuation of a two-and-a-half-year decline.

According to Anadolu Agency, new orders, output, purchasing activity, and inventories of inputs all saw declines in December. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, commented on the PMI data, stating, "New orders have dropped even more than in the previous two months, crushing any hopes for a quick recovery." He noted that this perspective is reinforced by the accelerated decline in order backlogs.

De la Rubia further explained that a sign of recovery in the industry would be companies beginning to rebuild their inventories of intermediate goods. However, December did not indicate any such activity. Instead, companies reduced inventories at a rapid pace and accelerated the depletion of finished goods inventories, expecting continued weak demand.

Despite these challenges, business confidence showed a modest improvement, with growth expectations reaching a four-month high.