Eurozone growth: 'signs of life' in periphery

(BRUSSELS) - Eurozone manufacturing and service activity accelerated in January, pulled by Germany and France, with signs of life in countries besieged by debt, a key growth indicator showed Thursday.

Germany's business activity rose at the second-fastest rate in the history of the survey compiled by the Markit research firm, with near record hikes in manufacturing and services.

Growth acceletarated to a four-month high in France with a faster expansion in services activity offsetting slower manufacturing growth, according to the purchasing managers' index (PMI), a survey of 4,500 euro area companies.

Signs of improvement were spotted in countries beset by the debt crisis rocking the 17-nation single currency area since last year.

Growth in Ireland was the sharpest since August 2007, the rate of expansion in Italy rose slightly from a three-month low in December and stagnation in Spain marked an improvement from four months of contractions.

"The recovery remained two-speed, however, as Germany and France continued to lead the rest of the pack by some distance," Markit said.

The index hit 57 points in January, a nine-month high. The figure was higher than a previous estimate of 56.3 and up from 55.5 in December. Any score above 50.0 suggests economic expansion.

"The eurozone had an even better start to 2011 than the earlier flash PMI indicated," said Markit chief economist Chris Williamson.

"However, growth remains disturbingly biased towards Germany and, to a lesser extent, France," he said.

"Although some encouraging signs of renewed life were seen in the periphery, these were largely limited to manufacturing, reflecting improved sales in export markets, while services continued to struggle in the face of poor domestic demand."