Euro Zone Economy Showing Signs of Recovery, Optimism Builds
The euro zone's embattled economy has turned a corner, according to a business survey on Tuesday that showed businesses are more optimistic about the future but highlighted a growing chasm between the region's economies.
Markit's Eurozone Composite PMI, which gauges business activity across thousands of companies and is seen as good gauge of growth, rose in January to a 10-month high of 48.6 from 47.2 in December - an improvement on the preliminary reading of 48.2.
While still signalling a contraction as the index has been below the 50 mark that signifies growth since February last year, it has risen consistently in the last three readings.
Private industry makes up nearly two-thirds of the euro zone's economy and worryingly for policymakers, the data showed a widening chasm between Germany - Europe's largest economy - and France, the bloc's second biggest.
"The euro zone is showing clear signs of healing, with the downturn easing sharply in January and the region moving closer to stabilization in the first quarter," said Chris Williamson, chief economist at Markit.