* Polish, Czech PMIs rise to 48.2, still show business shrinking
* Analysts say data point to further contraction in forth quarter
* Data suggests more central bank easing, Poland to cut on Wednesday
By Michael Winfrey
PRAGUE, Dec 3 Manufacturing in the EU's two biggest eastern economies shrank for the eighth straight month in November, pointing to a further slowdown in Poland and a fifth month of recession for the export-dependent Czechs.
With the euro zone debt crisis hitting consumers in their main export markets, the countries of central and Eastern Europe have cut output of the cars, electronics and other manufactured goods that are their main source of national income.
Combined with government austerity measures at home that have deterred consumers and companies from spending, that has extended a Czech recession that started at the end of 2011. In Poland, a once robust expansion is slowing to its weakest rate since the height of the economic crisis in 2009.
A slower decline in euro zone manufacturing, especially in the bloc's biggest economy Germany, has raised some hopes that manufacturing orders can arrest their slide some time next year, but analysts said Monday's data indicated recovery was still far away.
The Purchasing Managers' Index (PMI) in both Poland and the Czech Republic rose to 48.2 points in November, showing a slower decline than in the previous month but still below the 50 level that divides contraction from growth.
The figures were less weak than Poland's 47.3 in October and 47.2 for the Czechs, and well above the 47.5 predicted by analysts for both countries in Reuters polls. They showed a similar picture to the euro zone, where the manufacturing PMI in the currency bloc firmed to 46.2, from 45.4 in October. Even so, that marked a 16th month of shrinking euro zone activity.
In Hungary, where the PMI is calculated under different methodology and is often very volatile, the numbers rose to 52.3 in November, showing significant growth, from 49.9 in October. But analysts said the picture remained grim.
"The situation will not improve dramatically but rather only gradually," said Piotr Bujak, chief economist at Nordea Poland.
"This turnaround in the euro area will not be strong enough to avoid further slowdown in the Polish economy in the final months of this year and will not be strong enough to help the Czech and Hungarian economies to get out of a recession."
Economists largely consider PMI one of the best forward looking indicators for economic performance, although in Poland analysts often look more to local consumer and business surveys.
The region's currencies were virtually flat after the data.
In Poland, the region's largest economy, output, new export orders and employment all declined at a slower pace.
Buoyed by its 38-million-strong consumer market, Poland is the only European Union state to have avoided recession since 2008. While growth has slowed dramatically, it has suffered less than its regional peers from the fall in euro zone demand.
But plummeting euro zone demand for consumer goods such as cars has spelled trouble for the Czechs, whose exports account for 85 percent of economic output.
Data showed on Monday new car registrations in France fell 19.2 percent in November, meshing with last month's announcement by a Czech car factory run by Toyota and Peugeot Citroen that it would cut production this year by 20 percent.
Czech new export orders fell for the 13th straight month, and on a quarterly basis, data for the fourth quarter signalled the sharpest contraction since third quarter 2009.
The Czech economy shrank 1.5 percent year-on-year from July to September, extending a recession dating from the end of 2011, and analysts said they expected no recovery before the year end.
"The Czech economy has contracted in the last four quarters to third quarter 2012, and the PMI does not point to a turn to positive growth in the last quarter of this year either," said HSBC economist Agata Urbanska
The Czech central bank has slashed interest rates to 0.05 percent, leaving it armed with only unconventional tools such as currency intervention if it needs to take further action.
Poland's central bank has been more hesitant to cut quickly. But following data on Friday showing growth at 1.4 percent in the third quarter - its slowest since 2009 - analysts said they expected at least another quarter point cut to 4.25 percent on Wednesday.
"The MPC could seriously consider an interest rate cut of 50 basis points, but we believe that it will feel satisfied with a cut of 25 bps, although it may be open to more monetary easing down the road," ING wrote in a note to clients. (Additional reporting by Jana Mlcochova and Karolina Slowikowska; Editing by Ruth Pitchford)