(Corrects quote in 10th paragraph to show ECB meets Jan 15, not Jan 8)
By Jonathan Cable
LONDON, Jan 2 (Reuters) - Manufacturing activity in the euro zone sank to a record survey low in December, below an already dire flash reading and the outlook remains grim as new orders also sank to new lows, private sector data showed on Friday.
The downturn in activity was accompanied by falling inflationary pressures, clearing the way for the European Central Bank to cut interest rates again when it meets later this month, as it is expected to do.
The Markit Eurozone Purchasing Managers Index (PMI) for the manufacturing sector slumped to 33.9 in December, a low not seen in the survey's 11-year history and well below the 34.5 flash estimate and 34.5 forecast by economists.
The index is considerably below the 50.0 mark that divides growth from contraction and the outlook is grim with the new orders index slumping to a new survey low of 26.4 from the flash estimate of 27.4 and 28.8 in November.
"It casts an even darker shadow over the state of the euro zone economy," said Gilles Moec at Bank of America.
"We think it is consistent with a major contraction in GDP both in the fourth quarter of 2008 and the first quarter of 2009 -- probably something like a contraction of a full percentage point in both quarters."
Data due to be released later on Friday are expected to show a drop in factory activity in the United States to its weakest level since the 1981-82 recession. Earlier data showed UK manufacturing activity remained near last month's record low.
The euro area survey showed factory output, new orders, employment, stocks of purchases, backlogs of work, quantity of purchases, new export orders and input and output prices all fell to record lows.
The euro ticked down slightly after the release.
"The survey intensifies pressure on the ECB to cut interest rates significantly further at its 15 January meeting," said Howard Archer at IHS Global Insight.
Input and output price pressures falling to record lows will add weight to those expectations.
The euro zone was officially declared in recession toward the end of last year following a second quarterly contraction in economic output. Analysts polled by Reuters do not see a return to growth until the final quarter of this year.
Factories across the 15-nation bloc are struggling. PMI indexes for three of the four biggest euro zone countries -- Germany, France, Spain -- also hit record lows, while Italy's rose only slightly.
December was the seventh straight month the euro zone PMI has shown contracting activity. (Reporting by Jonathan Cable, Editing by Tony Austin)