According to the report from IHS Markit, Eurozone PMI Composite Output Index strengthened for a second successive month at the start of 2020. Rising to 51.3, from 50.9 in December and above the earlier flash reading, the index indicated a modest rate of growth, but nonetheless the highest recorded by the survey since last August.

Expansion of the private sector was again driven by the services economy during January, although growth here was softer than in the previous month. Manufacturing output continued to fall, extending the current sequence of contraction to a full year. However, the rate of decline was the weakest recorded by the survey since last June.

All nations covered by composite PMI data recorded an expansion in private sector output during January. Ireland led the way, expanding at its fastest pace in just under a year.

The Eurozone PMI Services Business Activity Index was a little lower during January, falling to 52.5, from 52.8 in the previous month. Weaker expansion reflected slower service sector gains in France and Spain. All other nations registered stronger growth compared to December.

A solid increase in new work was signalled during January, with growth unchanged on December's four-month high. Companies again took on additional staff, with employment rising at a solid pace that was slightly stronger than the previous month. Additional capacity helped firms to broadly keep on top of their workloads as backlogs rose only marginally.

Finally, business confidence about the future was the strongest recorded since last April. With the exception of Spain - where sentiment fell to its joint-lowest in over six years - optimism was higher across the region during January.