LONDON—Euro-zone private sector activity returned to modest growth in January, raising hopes the currency bloc may not face as severe a downturn as previously feared, a survey showed.
Markit Economics Friday said its final composite purchasing managers index for the 17-nation currency area rose to 50.4 from 48.3 in December, putting it marginally back above the 50 threshold that separates growth from contraction.
That is the first growth reading in five months and matches analyst expectations as well as last month's preliminary reading of the index.
The upturn was led by the stronger "core" nations of Germany and France, suggesting a two-speed Europe is taking shape as debt-saddled nations, mainly on the euro-zone's periphery, struggle to grow.
German business activity grew robustly, its PMI rising to 53.9 from 51.3, while in France the index rose to 51.2 from 50.0.
The region's third- and fourth-biggest economies, Italy and Spain, continued to see business activity shrink, although at slower rates than in recent months. Italy's index rose to a four-month high of 45.7, while Spain's climbed to 46, its highest in six months.
