Business activity across the 20 countries that use the euro expanded in January for the first time in six months, according to data published Tuesday, providing fresh evidence that Europe’s economy could confound expectations and dodge a recession this year.
An initial reading of the eurozone’s Purchasing Managers’ Index, which tracks activity in the manufacturing and service sectors, rose to 50.2 in January from 49.3 in December, indicating the first expansion since June. A reading above 50 represents growth.
The return to modest growth was helped by falling energy prices and an easing of supply chain stress, which helped temper rising input costs for producers.
The uptick was accompanied by a sharp improvement in optimism about the year ahead, as the recent reopening of China’s economy following the lifting of Covid restrictions helped push…