By Marcin Grajewski
BRUSSELS, April 23 (Reuters) - Euro zone factories posted a record annual fall in demand in February, data showed on Thursday, underscoring the depth of the recession although the monthly decline was much smaller than expected.
Industrial new orders in the 16 countries using the euro sank 34.5 percent year-on-year on shrinking demand for raw materials and semi-finished products, the European Union statistics office, Eurostat, said.
It was the steepest drop since measurements started in 1996.
The monthly fall in orders of 0.6 percent was smaller than the 2.4 percent expected by analysts. Economists polled by Reuters had expected an annual decline of 34.8 percent.
Eurostat revised up January order figures to -2.0 percent on the month from a previous reading of -3.4 percent. The annual indicator was revised down to -34.3 percent from -34.1 percent.
The data pointed to continuing recession in the currency area as the world struggles with the worst financial crisis in decades.
But separate data showed the euro zone's services and manufacturing sectors gave their best performance in six months in April as Markit's Flash Services Purchasing Managers' Index (PMI) rose to 43.1 from 40.9 in March.
Eurostat said demand fell for all categories of goods in annual terms, with capital and intermediate products -- commodities, raw materials and semi-finished goods -- suffering the most, down 38.4 percent and 37.2 percent respectively.
But in monthly terms capital goods and non-durable consumer goods rose, by 2.9 percent and 1.3 percent respectively. Intermediate goods fell 3.2 percent month-on-month.
Germany, the euro zone's largest economy, saw the second-biggest orders decline in the currency area, 39.4 percent year-on-year. Factory demand fell most in the Netherlands, so far a relatively good performer -- by 40.2 percent.
France, the second-biggest economy in the bloc, saw a monthly increase in orders, 4.8 percent, with an annual decline of 24.3 percent.
Euro zone orders excluding volatile transport equipment -- motor vehicles, ships, trains and planes -- dropped by 1.3 percent on the month and 34.1 percent year-on-year.
Eurostat also said that in the wider 27-nation European Union, industrial new orders fell 1.4 percent month-on-month and 33.3 percent annually. (Reporting by Marcin Grajewski, editing by Dale Hudson)