(BRUSSELS) - Business activity in the 15 nations sharing the euro slumped in September to the lowest level since just after the attacks on the United States in 2001, according to a survey on Tuesday, fuelling fresh recession fears.

The eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, slid to 47.0 points in September from 48.2 in August, according to an initial estimate.

The new figure, which brought the index to its lowest level since November 2001, fell short of an economists' estimate of 47.8.

"The fall in oil prices and the decline in the euro from mid-July to mid-September has done nothing to raise the spirits of the business sector in the eurozone," said Bank of America economist Holger Schmieding.

"To the contrary, the mood took a further sharp turn for the worse in September according to the flash purchasing managers indices," he added.

The index's fall marked the fourth consecutive month of contraction, which is indicated by a reading of less than 50 points.

Meanwhile, the index for activity in the eurozone's vast services sector also retreated, falling to 48.2 points from 48.5 in August, while manufacturing activity dropped to 45.3 from 47.6 in August.

"Eurozone PMIs kept delivering bad news in September, confirming that the slowdown the overall economy is experiencing is severe and will be rather prolonged," said economist Aurelio Maccario at Italian bank Unicredit.

"September's eurozone flash PMI surveys continue to suggest that the region may have entered its first technical recession since the inception of the euro," said economist Ben May at consultants Capital Economics.

He said that the index indicated that the eurozone economy shrank by 0.2 percent in the third quarter, which if confirmed would be the second consecutive quarter of contraction after a 0.2 slump in the second quarter.

Economists define a technical recession as two consecutive quarters of contraction.

The European Commission forecast earlier this month that the eurozone would escape a technical recession by the narrowest of margins, although the estimate was made before the turmoil on financial markets over the last week.

Economists said that darker outlook for economic activity, which is likely to cool inflation pressures, would likely lead to interest rate cuts at the European Central Bank starting early next year.

"The further deterioration ... (in the) surveys heightens concern that the eurozone is headed for recession and reinforces our belief that eurozone interest rates have not only peaked at 4.25 percent but will start heading down in the first quarter of 2009," said Global Insight economist Howard Archer.

Separately, official EU data showed on Tuesday a surprise jump in eurozone factory orders, offering an increasingly rare ray of light.

However, much of the increase was driven by demand for transport equipment, which includes such things as trains and airplanes and which can vary widely from one month to another.

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