Surveys of eurozone businesses found January was their best month since the middle of last year, but firms also felt the need to keep cutting prices and indeed did that at the fastest rate in nearly five years.
Of the region’s four largest countries, output expanded in Germany, Italy and Spain, but the downturn in the French economy extended into its ninth month.
The surveys of thousands of companies in the manufacturing and services sectors were carried out mostly before the European Central Bank’s decision to scale up its stimulus programme with quantitative easing to boost the region’s economic growth.
Confidence about the ECB’s QE programme and signs of growth in new orders accelerating helped lift an index of optimism among service firms by the biggest one-month margin in over five years.
Markit, which sent out the surveys and compiles the data, said it pointed to first-quarter economic growth of 0.3 percent in the eurozone.
In Britain identical surveys showed activity in the dominant service industry expanded faster than expected.
The UK is outside the currency union and markets are instead focusing on when monetary policy will be tightened.
British businesses experienced faster growth than their eurozone counterparts, while the fall in oil prices dampened rising prices paid by services companies for goods and energy.