LONDON (May 2): The ongoing downturn in eurozone manufacturing activity deepened in April due to crumbling demand despite factories cutting prices, pushing firms to reduce headcount again, a survey showed on Thursday.

HCOB's final eurozone manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 45.7 in April from March's 46.1, below the 50 mark denoting growth in activity for a 22nd month. However, it was just ahead of a 45.6 preliminary estimate.

An index measuring output, which feeds into a composite PMI due on Monday and is seen as a good gauge of economic health, nudged up from March's 47.1 to 47.3, matching the flash estimate.

"What is going to rescue the eurozone economy? While this is a difficult question, one thing is clear: It's not the manufacturing sector. Instead, this sector is prolonging its drawn out recession into April," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

The bloc's economy recovered last quarter from a mild recession and expanded 0.3% quarter-on-quarter in January-March, official data showed on Tuesday.

Suggesting no immediate turnaround for manufacturers the new orders index, below 50 since May 2022, fell to a four-month low of 44.1 from 46.0.

Factories depleted stockpiles of both purchased and final goods and reduced the size of their workforce for an eleventh month.

The malaise continued despite manufacturers reducing prices charged again, adding to evidence the European Central Bank will reduce borrowing costs in June, in a widely expected move as inflation eases.

Eurozone inflation held steady at 2.4% as predicted in April but a crucial indicator on underlying price pressures slowed, data showed on Tuesday.