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Eurozone manufacturing growth confirmed at 34-month low in December 2018

The eurozone's manufacturing sector expanded at its slowest pace in 34 months, adding to signs of slowing economic growth in the single-currency area.

The IHS Markit manufacturing purchasing managers' index came in at 51.4 in December 2018, in line with a flash estimate but down from 51.8 in November 2018. While the index remained above the 50-point threshold to indicate an expansion, the latest reading was the lowest level since February 2016.

Total new work fell amid challenges in the automotive sector and wider political uncertainties, the report said. Factory firms, meanwhile, logged "modest" production gains.

"The weakness of the recent survey data in fact raises the possibility that the goods-producing sector could even act as a drag on the overall economy in the fourth quarter [of 2018], representing a marked contrast to the growth surge seen this time [in 2017]," said Chris Williamson, chief business economist at IHS Markit.

In Germany, the headline manufacturing PMI fell to 51.5 in December 2018 from 51.8 a month ago, marking its weakest reading since March 2016. France's manufacturing sector logged its first contraction in 27 months as the associated PMI dropped to 49.7 from 50.8.

In Italy, the PMI edged higher to 49.2 from 48.6 but still pointed to a third consecutive month of contraction in manufacturing activity.