Eurozone business activity dragged down by France

Business activity in the 18 nations that use the euro lost some momentum in February, dragged down by weakness in the bloc's second-largest economy, France.

A poor survey reading of activity in France outweighed strong growth in Germany, the region's biggest economy, and suggests the eurozone's economic revival will remain patchy and fragile in the short term. Other data Thursday showed French consumer prices falling at a record rate in January from December, highlighting weakness in domestic demand.

Data provider Markit said its composite purchasing managers' index, a monthly gauge of activity across the manufacturing and services sectors of the 18-nation eurozone, fell to 52.7 in February from 52.9 the previous month. A reading above 50 indicates month-to-month expansion in activity.

"A dip in the eurezone PMI provides a reminder that the region's recovery continues to be uneven and fragile," said Chris Williamson, chief economist at Markit. "Growth continued to be led by Germany, which contrasts with a worrying renewed downturn in France."

German business activity grew at the fastest rate in almost three years. But activity in France shrank, a new sign that Germany is outpacing other euro nations as the bloc's economy stages a fragile recovery from its fiscal crisis.

Thursday's data are an early estimate and don't give a breakdown of business activity in other eurozone nations.

The eurozone economy grew 0.3 per cent during the final three months of 2013, picking up speed after a slowdown the previous quarter. The economy began recovering in April.

Mr Williamson said Markit's survey data for the first two months of 2014 indicate a pickup in economic growth in the first quarter. New orders taken by businesses rose at the fastest rate since mid-2011, he said.

- Dow Jones Newswires