Data released by S&P Global on Friday showed that private sector activity in the Eurozone has continued to decline, suggest there will be yet another contraction in the region’s economy due to a deepening downturn in manufacturing.

HCOB’s flash Composite Purchasing Manager’s Index (PMI) for the Eurozone, which offers a rough picture of an economy’s overall health, increased slightly to 47.1 in September, compared to the 33 month low of August when it hit 46.7.

Economists warn, however, that the measure is still below the 50 level which separates expansion and contraction, noting the Eurozone is still far from returning to growth any time soon.

Cyrus de la Rubia, chief economist at Hamburg Commercial Bank said the PMI services readings for the Eurozone “paint a grim picture.”

He said, “We expect the Eurozone to enter a contraction in the third quarter. Our nowcast, which incorporates the PMI indices, points to a drop of 0.4% compared to the second quarter.”

For four months in a row, Eurozone output has been shrinking, with a deepening decline in manufacturing leading the slide, according to data.

de la Rubio said, “The main drag continues to come from manufacturing where the order situation deteriorated further.”

According to the latest figures, the PMI readings for September were negative for both manufacturing and services, with manufacturing having been below 50 for 15 months.

S&P Global said that despite expectations of some stabilization, the main drivers of the extended downturn of business activity in the Eurozone were the region’s two biggest economies, Germany and France.