LONDON, Dec 5 Reuters The downturn in euro zone business activity eased last month but still indicates the bloc39;s economy will contract again this quarter as the dominant services industry continues to struggle to generate demand, a survey showed.

Last quarter the economy contracted 0.1, according to official data, and Tuesday39;s Composite Purchasing Managers39; Index PMI for November indicated the 20country currency union is on track to do so again this quarter, meeting the technical definition of recession.

HCOB39;s composite PMI, compiled by SP Global and seen as a good guide of overall economic health, rose to 47.6 from October39;s near threeyear low of 46.5 and coming in above a 47.1 preliminary estimate.

That was its best reading since July but remained firmly below the 50 mark separating growth from contraction.

A PMI for the services sector rose to 48.7 from October39;s 47.8.

The service sector maintained its downward slide in November. The modest improvement of the activity index does not leave much room for optimism regarding a swift recovery in the immediate future, said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

The sombre outlook is reinforced by the fifth consecutive monthly shrinkage in new business. A fall in GDP is on the cards for the fourth quarter.

An index measuring new business a gauge of demand was below 50 for a fifth month although it did rise to 46.7 from 45.6.

However, overall sentiment about the year ahead…