Eurozone private sector grows for seventh month in a row
THE private sector in the eurozone kicked off 2014 on a positive note, recording the seventh consecutive month of growth.
Growth picked up in Germany and the rate of decline eased in France, while the rest of the region also saw a strengthening upturn.
New orders across the euro area rose for a sixth month with backlogs of work continuing to fall marginally, according to the latest flash composite Purchasing Managers' Index (PMI) for the bloc.
It gauges activity across thousands of businesses and is regarded as a good indicator of the health of an economy.
But it wasn't all positive news. Employment was cut in the month despite stabilising in December as companies remained too uncertain to expand.
Employment has risen on average since December 2011, although the trend in the rate of job losses has eased considerably over the year.
Chris Williamson, economist at financial information firm Markit which compiles the data, said the eurozone's recovery gained further momentum in January.
"Across the region, growth has improved to its fastest since early 2011, meaning the periphery is showing clear signs of starting 2014 on a firm footing," Mr Williamson said.
"However, while gathering pace, the upturn remains fragile. Companies cut employment again and selling prices continued to fall amid still weak demand.
"Deflationary forces are clearly a concern in many countries."
The headline PMI rose from 52.1 in December to 53.2 this month.
Anything above 50 indicates expansion, while below that signals contraction.
Manufacturing showed the strongest gains, with output, new orders, and new export orders all showing the largest monthly rises since April 2011.
Service sector companies saw a more moderate increase in activity than manufacturers, but still reported that activity grew at the second fastest rate since June 2011.
But the report said that an easing in growth of services suggests any expansion of activity in February may remain weak.
Mr Williamson said growth is being led by Germany while France, the bloc's second biggest economy, looks likely to act as a drag on the eurozone recovery for some time.