Factories in the eurozone remained stuck in contraction last month, according to surveys that were shown on Monday, with the data suggesting a recovery could be some way off, although Asian and British manufacturers showed tentative signs of recovery.

However, analysts say prospects of slowing U.S. growth, which is likely to lead to interest rate cuts by the Federal Reserve (Fed) this month, and uncertainty over the outcome of the U.S. presidential election cloud the trade outlook.

HCOB's final eurozone manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, stood at 45.8 in August, just ahead of a 45.6 preliminary estimate but well below the 50 mark separating growth from contraction.

"The final August manufacturing PMI reading was yet another indication the recovery of the industrial sector will neither be immediate nor vigorous, as the eurozone index remains stuck in contractionary territory," said Riccardo Marcelli Fabiani at Oxford Economics.

A PMI covering new orders sank to its lowest since December and demand from abroad also fell at the fastest rate this year.

That decline came as eurozone manufacturers raised their prices for the first time in 16 months, driven by factories in France, the Netherlands, Greece and Italy.

Still, overall inflation in the currency bloc fell to a three-year low of 2.2% in August, preliminary official data showed on Friday, strengthening the case for further policy easing from the European Central Bank (ECB).

It will cut its deposit rate twice more this year, in September and December, according to more than 80% of economists in an August Reuters poll, fewer reductions than markets currently expect.

The downturn in German manufacturing accelerated and in France, activity contracted at the fastest pace since January.

But in Britain, factories had their strongest month in more than two years as demand at home offset a fall in exports, adding to signs of momentum in the economy.

That poses a favorable backdrop for the new government of Prime Minister Keir Starmer, who is seeking to speed up growth.

Chips

Asian chip makers benefited from firm demand, but economic headwinds pose a risk to the region.

China's Caixin/S&P Global manufacturing PMI rose to 50.4 in August from 49.8 in July, beating analysts' forecasts.

The reading, which mostly covers smaller, export-oriented firms, shows a more optimistic view than an official PMI survey released on Saturday, which indicated an ongoing decline in manufacturing activity in August.

"The PMIs for August suggest that economic momentum held broadly steady last month, with modest improvements in manufacturing and services helping to offset a further slowdown in construction activity," Gabriel Ng, assistant economist at Capital Economics, said in a research note on China's PMI.

"But with factory gate price declines accelerating, the economy clearly remains at risk of slipping back into deflation," Ng said.

Factory activity in South Korea and Taiwan also expanded in August, while Japan saw a slower rate of contraction due in part to solid global demand for semiconductors.

Japanese manufacturers also gained from a rebound in car output after a safety scandal led some plants to suspend production temporarily.

However, the surveys showed that manufacturing activity contracted in Malaysia and Indonesia, underscoring the pain some of the region's economies face due to China's prolonged slowdown.

"Chip-producing countries are doing fairly well, but China's slowdown will continue to drag on Asia's manufacturing activity for quite some time," said Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute.

"Slowing U.S. demand could add to the pain on Asian economies, many of which are already wary of the fallout from sluggish Chinese growth," he said.

Japan's final au Jibun Bank Japan manufacturing PMI rose to 49.8 in August, contracting for a second straight month but less sharply than in July when the index reached 49.1.

South Korea's PMI stood at 51.9 in August, up from 51.4 in July, due in part to strong customer confidence and new orders in the domestic market, the survey showed.

Malaysia's PMI stood at 49.7 in August, flat from the previous month, while that of Indonesia fell to 48.9 from 49.3 in July, the surveys showed.

India's manufacturing activity growth eased to a three-month low in August as demand softened significantly, casting another shadow over the otherwise robust economic outlook.