* European factories endure another poor month in March -PMIs
* UK manufacturing decline eases slightly
* Factories in Germany, Ireland slip back into contraction
* Cyprus had little effect on manufacturing so far
By Andy Bruce
LONDON, April 2 (Reuters) - Manufacturing across Europe's major economies endured another month of mostly deep decline in March, dragging down even former bright spots, surveys showed on Tuesday.
The slump among British manufacturers eased slightly, but overall purchasing managers indexes (PMIs) made gloomy reading.
Factories in Germany and Ireland, the relative stars of February's PMIs, fell back into decline last month. Everywhere else, the industrial rot extended.
Spanish manufacturing declined at its fastest pace since October, which followed news the government will revise its economic forecasts for 2013 to show a 1 percent contraction, from a 0.5 percent decline previously.
In France, factory activity retreated for a 13th month and car registrations there dived 16.4 percent in March, further underlining the malaise sweeping through the euro zone's second-biggest economy.
"The euro zone's March manufacturing PMIs ... (banishes) the recovery scenario projected by the European Central Bank further beyond the realm of likely probabilities," said Lena Komileva from G+ Economics in London.
Markit's Eurozone Manufacturing PMI fell in March to 46.8 from 47.9 in February - slightly better than an preliminary estimate of 46.6, but extending its run below the 50 mark that separates growth and contraction for a 20th month.
"Based on the experience of the past four years, the first quarter's Eurozone PMI average of 47.5 is consistent with no GDP growth (at best) and a weakening momentum into the second quarter."
The escalation of the crisis in Cyprus in the final week of March, however, had little bearing on euro zone manufacturing activity, at least judging by the fact the final PMI reading was no worse than the preliminary.
"We've had the Italian election, we've had the Cyprus story; we're a little bit uncertain to what extent that has played in," said Anatoli Annenkov, senior European economist at Societe Generale.
"But certainly, on the manufacturing side, that's a little bit weaker than what we'd hoped."
Combined with data on Monday from the United States, which showed factory activity growing at a three-month low, March made for an ominous month for the global economy - especially given the extent of jubilance on stock markets so far this year.
European shares extended gains on Tuesday after the data, although the euro slipped.
Tuesday's unemployment figures for the euro zone brought little cheer, showing the jobless rate held at 12 percent in February, a new record jointly with January, which was revised up from 11.9 percent.
THE CYPRUS QUESTION
Data from Britain were mixed. The UK manufacturing purchasing PMI index came in at 48.3, only slightly above February's surprisingly poor reading of 47.9, and a touch weaker than the Reuters consensus forecast.
While lending to British consumers ticked up in February, the number of mortgage approvals for house purchases fell for a second month, Bank of England data showed. Nonetheless, the value of home-backed lending rose.
"The onus is now on the far larger service sector to prevent the UK from slipping into a triple-dip recession," said Rob Dobson, senior economist at Markit, which compiles the PMIs.
Looking to April, the question will be to what extent the crisis in Cyprus, or rather the uncertainty it created, will have on the wider European economy.
Cyprus struck a 10-billion euro bailout deal with the European Union and International Monetary Fund last Monday, designed to untwine it from a failed banking sector that has long dominated its economy.
"While in some respects it is reassuring to see the events in Cyprus did not cause an immediate impact on business activity, the concern is that the latest chapter in the region's crisis will have hit demand further in April," said Chris Williamson, chief economist at Markit.