Is the eurozone economy turning a corner?

UK firms have suffered from uncertainty across the eurozone, but there are now glimmers of optimism

A new business survey has suggested that the eurozone economy may finally be starting to turn a corner, as businesses grow more optimistic about the future on the back of increasing activity.

The Markit Purchasing Managers’ Index (PMI) figure, which measures business activity in thousands of firms across the eurozone, reached a 10-month high of 48.6, up from 47.2 in December. This was above expectations of 48.2, but below the magic 50 mark indicating growth.

Although the index indicated a contraction in the eurozone economy, it has risen consistently over the last three months and is the highest figure recorded since February last year.

Private sector industry accounts for more than two-thirds of the eurozone economy, with Germany leading the way in terms of growth.

Chris Williamson, chief economist at Markit, said: “The eurozone is showing clear signs of healing, with the downturn easing sharply in January and the region moving closer to stabilisation in the first quarter”.

A survey of thousands of services firms also suggested that optimism was at its highest level since last May, whilst factories across the eurozone had their best month for a year.