Italian manufacturing activity contracted for a ninth month running in December albeit at a slower pace than the month before, a survey showed on Thursday, amid persisting declines in output and new orders.

The HCOB Global Purchasing Managers’ Index (PMI) for manufacturing climbed to 46.2 from November’s 12-month low of 44.5, remaining well below the 50 mark that separates growth from contraction.

Nevertheless, it was above a median forecast of 44.9 in a Reuters survey of nine analysts.

“The Italian manufacturing sector remains in a challenging situation at the end of the year. The sector continues to struggle with weak demand from the eurozone, high energy costs, and significant issues in the automotive sector,” said HCOB economist Jonas Feldhusen.

The manufacturing output sub-index rose to 46.9 from 43.3 the month before, while the new orders indicator increased to 44.2 from a previous 41.9.

Italian Economy Minister Giancarlo Giorgetti said last month that the euro zone’s third-largest economy would likely end 2024 with a growth rate of 0.7%, below the official government target of 1%, noting the deepening slump in the industrial sector.