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Eurozone manufacturing sector shows signs of recovery

The eurozone's manufacturing sector is showing signs of edging back to recovery, despite the region's ongoing debt crisis.

According to the latest purchasing managers' index (PMI) for this key industry published today (1 February) by Markit, the decline in production and new orders both eased in January as conditions for manufacturing companies began to improve.

Despite the fact the PMI remained below the growth threshold of 50 by posting a score of 47.9 last month, this still represents a significant upturn on December's figure of 46.1 and is also above Markit's flash estimate of 47.5.

Furthermore, this is also the PMI's highest score for 11 months and the group attributed this movement primarily to the ongoing strength of the German manufacturing sector, as the eurozone's foremost economic power's individual PMI hit an 11-month high of 49.8.

Chris Williamson, chief economist at Markit, said the report proves the manufacturing sector is "close to stabilising after contracting throughout much of last year".

By Claire Archer