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Eurozone factory downturn deepens

Eurozone factory downturn deepens
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There was no respite for the eurozone economy, as manufacturing in the region shrank for the 15th month running in October.

Surveys of factory managers showed output and new orders both fell.

Manufacturers were the driving force behind the bloc’s recovery from the last recession, but the downturn in factory activity that began in smaller periphery countries has now engulfed core members.

Europe’s largest economy, Germany saw its manufacturing sector shrink for the eighth month. French output has slipped in all but one of the last 15 months.

In Spain and Italy the pace of decline accelerated.

Ireland was the only one of the 17 countries using the euro to see growth.

Economists say flagging growth prospects for the eurozone’s biggest countries will prompt the European Central Bank to further ease monetary policy in the next few months.

A cut in interest rates to a new record low of 0.5 percent is expected.

Figures due out next week are forecast to show the eurozone’s dominant service sector has also contracted for all but one of the last 14 months.