Eurozone business activity hit a nine-month high in December, continuing to show improvement from recent lows but remaining in negative territory, a key survey showed Friday.
The gains, however, do suggest that there could be a return to growth in the first half of next year, as long as there are no unpleasant surprises, it said.
The Purchasing Managers Index (PMI) Composite Output Index, a leading indicator compiled by the Markit research firm, came in at an preliminary 47.3 points for December, up from 46.5 in November and edging closer to the 50 points boom-bust line.
For the eurozone services sector alone, the PMI came in at 47.8 points, up sharply from 46.7 points in November while manufacturing gained only slightly, to 46.3 from 46.2.
Markit said that while the improvement in December suggests the worst is over, the figures continue to "signal a steep overall rate of decline, with business activity levels having now fallen in 15 of the last 16 months.
"The eurozone downturn showed further signs of easing in December, adding to hopes that the outlook for next year is brightening," Markit chief economist Chris Williamson said in a statement.
"It looks like the downturn reached its fiercest back in October, since when the PMI has turned up steadily (but) by no means spectacularly," Williamson said.
At the same time, the survey pointed to a further overall economic contraction in the fourth quarter, possibly more than the shrinkage of 0.1 percent recorded in the third, he said.
"However, a return to growth is looking like an increasing possibility in the first half of next year, barring any surprises, if the recent improvements in the survey data can be sustained."