London, Dec. 3 (Bloomberg) -- European manufacturing shrank in November for the eighth straight month and companies lowered prices, an industry surveyed showed. The Purchasing Managers' Index for the dozen nations sharing the euro rose to 43.6 from 42.9. A reading below 50 shows a contraction and above 50 an expansion. Employment shrank at the fastest rate since the survey was started in July 1997. Companies cut prices at the fastest rate in almost three years. A stalled world economy is eroding demand for exports and rising unemployment is sapping consumer confidence. Companies in the nations using the euro have said they plan to eliminate about 273,000 jobs this year, according to Bloomberg data. ``In the U.S., there was a total collapse in demand after Sept. 11,'' said Klaus Schuetzdeller, chief executive officer of Palfinger AG, the largest maker of truck-mounted cranes. ``We are only selling a fraction now of what we sold before.'' For the first time since 1974, the world's three largest economies are shrinking simultaneously. The U.S. shrank at an annual rate of 1.1 percent last quarter while Germany shrank 0.1 percent. Japan is in its worst slump in two decades. Together, the three countries buy 25 percent of French exports. French manufacturers were more pessimistic last month than at any time in eight years. In Germany, which accounts for about 30 percent of the European economy, business confidence is the lowest in eight years.

Stalled Economic Growth
Almost a third of the German companies surveyed ``continued to report lower export demand through November, which was largely attributed to slower economic activity in the rest of western Europe and the U.S.,'' a separate survey on the country said. The nations that share the euro grew 0.1 percent in the third quarter, matching a 2 1/2 year-low recorded in the previous three months. Germany's economy shrank 0.1 percent after stalling in the second quarter. The Dutch economy contracted 0.4 percent. French executives said they will pare production as orders slumped to a five-year low. Exports, which account for 29 percent of the economy, plunged 11 percent in September. Airbus SAS sold 10 planes that month, compared to a monthly average of 15 this year.

`Very Troubled'
Valeo SA, Europe's largest publicly traded car-parts maker, said on Friday business next year will be worse than expected. Valeo said last month it will close 12 factories and cut 5,000 jobs. Faurecia SA, the continent's largest maker of automotive interiors, said on Friday it will post a loss this year amid lower demand from carmakers. ``We're in a very troubled situation,'' said Riccardo Perissich, a director of Pirelli SpA, Europe's biggest cable maker. ``The ECB could be convinced there's more room to maneuver.'' European inflation slowed to the lowest level in 18 months in November, giving the European Central Bank scope to lower interest rates in coming months to spur economic growth. Consumer prices rose 2.1 percent from a year ago, after rising 2.4 percent in October. The central bank says it wants to keep price rises below 2 percent, a goal it has missed for 18 months.

European Central Bank
The ECB has lowered its benchmark rate four times this year, most recently on Nov. 8, by half a point to 3.25 percent. The U.S. Federal Reserve has pared interest rates 10 times this year and the Bank of England seven times. Investors expect the ECB to wait until the start of next year before trimming rates again, futures trading suggests. The implied yield on the three-month Euribor contract maturing in March fell 2 basis points from yesterday's close to 3 percent. All but two of the 21 economists surveyed by Bloomberg News on Thursday and Friday predicted the ECB will keep its rate on hold when policy makers meet on Thursday.