Heavy discounting failed to stop euro zone business activity growing less than thought last month, a survey showed today, suggesting the euro zone's economy may contract again early next year. 

Markit's final November Composite Purchasing Managers' Index (PMI), sank to 51.1 from October's 52.1, missing an earlier flash reading of 51.4. 

The index is based on surveys of thousands of companies across the region and seen as a good indicator of growth

November was the 17th month the index has been above the 50 level that separates growth from contraction. 

But the new business sub-index fell below that mark for the first time since the middle of last year, dropping to 49.7 from 50.8 and suggesting a further downturn in December. 

"The region is on course to see a mere 0.1% GDP growth in the final quarter of the year, with a strong likelihood of the near-stagnation turning to renewed contraction in the new year unless demand shows signs of reviving," said Chris Williamson, survey compiler Markit's chief economist. 

A Reuters poll last month predicted 0.2% economic growth this quarter and 0.3% during the next quarter. 

A PMI covering the region's dominant service industry fell to 51.1 from October's 52.3, shy of the flash 51.3, and showed firms have been cutting prices for three full years now to drum up business. The output price index came in at 47.1. 

Further price cutting, together with signs of economic performance deteriorating in the core countries, will concern the European Central Bank which is battling to reinvigorate the economy and drive up dangerously low inflation. 

Annual inflation dipped to 0.3% in November, deep into the ECB's "danger zone" for price moves, although the central bank is not expected to alter its already very loose policy when it meets tomorrow. 

The ECB is offering banks long-term cheap loans and buying covered bonds and asset-backed securities. However, facing resistance from Germany, there is only an even chance it will buy government bonds, a Reuters poll found last week.