The Markit Flash Eurozone Composite Output Index, based on around 85% of normal monthly survey replies, posted its largest ever points fall in November to reach a new low in the survey’s ten year history. The latest decline signalled the sixth consecutive monthly contraction in private sector output, with the rate of deterioration gathering pace throughout this period.

The downturn was led by manufacturing, which saw output fall at a pace far in excess of anything previously seen over the survey’s history, with the sector contracting for the sixth straight month. A new record rate of contraction was also seen in the service sector, which also suffered a sixth successive monthly drop in activity.

In a sign that the rate of decline may continue to gather pace in coming months, expectations of business activity in 12 months’ time in the service sector edged down to a new record low.

The worsening output trend reflected a further acceleration in the rate of loss of new orders, which posted the largest monthly fall in the survey history. Record survey falls were seen in both manufacturing and services, with the former registering by far the steeper rate of decline as both total orders and new export orders fell at rates far in excess of anything seen over the past eleven-anda- half years.

Backlogs of uncompleted work also showed by far the largest drop in the survey history, led by a severe (and record) drop in manufacturing.

The rate of job losses climbed to the highest since May 2003 in response to the downturn and the development of excess capacity. Employment has now fallen for five consecutive months.

Headcounts fell in manufacturing and services, with the former registering a new record rate of decline while services job losses were more restrained, though still the highest since February 2004.

Input price inflation continued to ease very sharply from the near eight-year high seen back in July, dropping to show almost no change in November. The marginal increase in firms’ costs was the smallest seen since input costs began rising in August 2003.

Manufacturers’ input prices fell steeply during the month, registering the largest one-month fall since December 2001 as commodity prices continued to slump and suppliers competed on price to win business. Input cost inflation also moderated in the service sector, dropping to a four-and-a-half year low, subdued largely by lower fuel and transport costs but also by discounting to simulate sales.

Output prices fell for the first time since August 2005, with the rate of decline the steepest since July 2003, representing a marked contrast to July’s record rate of inflation. Prices charged fell at similar rates for both goods and services, in both cases falling at the fastest rates since July 2003. Commenting on the flash PMI data,

Chris Williamson, Chief Economist at Markit said: “The November flash PMI indicates a shocking deterioration in the Eurozone economy, with output and demand collapsing at sharply faster rates than October’s record declines. The recession has clearly deepened, with these survey numbers consistent with GDP declining by 0.5% or more in Q4, following the 0.2% contractions in Q2 and Q3.