The eurozone's manufacturing sector ended 2012 in recession, with a key index released Wednesday falling in December amid slumping production and lower export orders.
The London-based research group Markit said its purchasing managers' index (PMI) for the 17-member currency bloc declined to 46.1 points in Decemver, from 46.2 in November.
This represented the 17th consecutive month that the index has recorded a reading of below 50, which signals a business contraction.
"The eurozone manufacturing sector remained entrenched in a steep downturn at the end of the year," said Markit chief economist Chris Williamson.
Analysts had expected Markit to issue a final reading of 46.3 points. This would have been in line with the preliminary estimate it released last month.
"The region's recession therefore looks likely to have deepened, possibly quite significantly, in the final quarter," said Williamson.
New export orders have contracted for 18 months, Markit said, with eurozone manufacturing production declining for the tenth successive month in December.
The PMI showed the manufacturing sector in the eurozone's biggest economy, Germany, hitting a two-month low of 46 points.
The index also fell in Spain, Austria and Greece, which remains at the bottom end of the eurozone league table with a reading of 41.4.
While conditions in France's manufacturing sector edged up slightly, the PMI for Italy jumped from 45.1 in November to 46.7 in December.
"Manufacturers look to be in for another tough year in 2013, though prospects have brightened a little, as producers should benefit from stronger demand in key export markets such as the US and China," said Williamson