Eurozone private sector activity makes strong start to 2014

It's nice to have a more positive message to start the year.

And Christian Schulz, senior economist at Berenberg, says that 2014 is "off to a good start" as Eurozone purchasing managers' index (PMI) data comes in strong for January.

The euro area's composite PMI is up from 52.1 to 53.2 in January - with any number above 50 implying a private sector expansion - so this update suggests the rate of expansion has picked up.

Analysts had only anticipated a rise to 52.4.

James Howat, European economist at Capital Economics, says that January's reading is consistent with quarterly GDP growth of around 0.4 per cent.

France continues to lag

But looking towards the Eurozone's two big economies - Germany and France - the chasm between them remains apparent.

While French PMIs have picked up, both manufacturing and services remain in contraction, at 48.8 and 48.6 respectively.

Schulz suggests that Hollande's promised economic reforms may have finally had an impact on sentiment - but points out that a fall in the business confidence component does not suppor this.

"France is still lagging behind most of the rest of the Eurozone, not just in the PMIs," says Schulz. "The need for the actual implementation of reforms is pressing."

Meanwhile in Germany, business activity has seen its biggest jump in two-and-a-half years, with manufacturing and services PMIs at 56.3 and 53.6 respectively.