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STORY: The Euro zone's manufacturing woes deepened during June, according to a key survey released Monday (July 1).

The closely watched Purchasing Managers' Index - or PMI - showed manufacturing activity across the bloc fell to 45.8 last month.

That was well down from May's 47.3, but slightly ahead of analyst forecasts.

It also continues a two year run below the 50 mark separating growth from contraction.

One leading analyst from Hamburg Commercial Bank wasn't too downhearted.

He said he was inclined to see this as a temporary blip, rather than a sign of a prolonged downturn.

He added manufacturing growth was seen in other parts of the world in June, including the U.S., Britain and India - and believed this provided a supportive backdrop for euro zone manufacturers.

A new orders index dropped to 44.4 from 47.3.

That came despite factories cutting prices charged for a fourteenth month, although less steeply than in previous months.