Eurozone economy solid despite political fears

Eurozone business activity remained stable in January as a robust outlook defied political uncertainty with employment on the rise, a closely watched survey showed Tuesday.

Data monitoring company IHS Markit said its report suggested the 19-nation eurozone economy was set for solid growth with the new year starting on a strong note.

The positive assessment came amid widespread uncertainty for the global economy as the protectionist Donald Trump has taken office in the US and continuing turmoil over Brexit in Europe.

It said its January Composite Purchasing Managers Index came in at 54.3 points, only slightly down from December's 54.4 points.

The PMI measures companies' willingness to spend on their business and so gives a good idea of how well the underlying economy is performing.

Any reading above the boom-bust 50 points line indicates the economy is expanding.

Manufacturers had their best month since April 2011, "highlighting how political risk continues to be widely eschewed, with companies focusing instead on expanding their sales in the coming year," said IHS Markit chief business economist Chris Williamson.

He said the report pointed to economic growth of 0.4 percent in the first three months of 2017, supported by a weaker euro and the European Central Bank's unprecedented stimulus programme.

"Perhaps the most encouraging development is the upturn in hiring, with January seeing the largest monthly rise in employment for nine years amid improved optimism about the year ahead," Williamson said.

The burst of optimism comes at the start of a politically sensitive 2017. Top economies the Netherlands, Austria, France and Germany all hold elections this year, with expectations that non-mainstream populists could make inroads and destabilise the economy.