Euro-area manufacturing output contracted more than initially estimated in December, adding to signs a recession in the currency bloc may extend into this year as leaders struggle to tackle the sovereign-debt crisis.
A gauge of manufacturing in the 17-nation euro area fell to 46.1 from 46.2 in November, London-based Markit Economics said today. That’s below an initial estimate of 46.3 on Dec. 14. A reading below 50 indicates contraction. The gauge has been below 50 for 17 months.
The euro-area economy has shrunk for two successive quarters and economists foresee a further decline in gross domestic product in the final three months of last year. The European Central Bank forecasts contractions of 0.5 percent and 0.3 percent in 2012 and 2013.
“The euro-zone manufacturing sector remained entrenched in a steep downturn at the end of the year,” Chris Williamson, chief economist at Markit, said in the report. “The region’s recession therefore looks likely to have deepened, possibly quite significantly, in the final quarter.”
The euro was little changed after today’s report and traded at $1.3258 at 10:32 a.m. in Brussels.
With euro-area unemployment at a record, economists project the region’s GDP decreased 0.3 percent in the fourth quarter, according to the median of 22 forecasts in a Bloomberg survey.
“Manufacturers look to be in for another tough year in 2013, though prospects have brightened a little as producers should benefit from signs of stronger demand in key export markets such as the U.S. and China,” Williamson said.