BRUSSELS: The eurozone economy showed signs of a rebound in July after several months of sluggish activity, but France stood out as a laggard, a closely watched survey showed on Thursday.
"Eurozone growth rebounded in July," the private Markit research group, which published the data, said while warning that the crisis in Ukraine is clouding the outlook.
Its set of leading indicators - the purchasing managers' index (PMI) - turned in a figure of 54, above the 50-point signalling growth or downturn, up from 52.8 in June.
But the French economy showed further signs of slowing with an index reading of 49.4.
The French manufacturing sector was showing signs of sharp downturn and the services sector was sluggish. This reflected gloomy internal demand and a low level of confidence among businesses and households, Markit said.
The survey, widely regarded as reliable leading indicators on the course of economies, showed that countries on the edge of the eurozone which had been hardest hit at the height of the eurozone debt crisis, were achieving their strongest growth since 2007.
Germany was also showing strong growth, Markit said.
Across the 18-member eurozone, many companies reported that business had picked up again in July after an unusually high number of holidays, the survey said.
"However, growth of orders slowed slightly in July amid sings that expansion, especially in manufacturing, is being subdued by geopolitical concerns, in particular the escalating crisis in Ukraine," Markit said.
But there were big differences between national performances. Activity in Germany was expanding strongly, but in France activity was "contracting while growth accelerated elsewhere."
In the rest of the eurozone, business activity showed the biggest monthly increase since August 2007, before the financial crisis, Markit said.
Markit's chief economist Chris Williamson said the latest figures suggested that the eurozone economy was growing "at one of the strongest rates we have seen in the past three years."
But there was notable concern about the potential economic impact of the situation in Ukraine.
However, while eurozone peripheral countries were picking up speed, and the German economy was growing robustly, "the French economy is stagnating at best."
Berenberg bank economist Christian Schulz gave a more optimistic reading of the results for France.
"The eurozone recovery remains intact. Germany's domestic demand as well as the recovery in the reformed periphery are getting stronger and recent progress in France raises the chances that even the biggest laggard will at least stabilise," he said, while noting that the crisis in Ukraine could weigh on sentiment.
At Capital Economics, economist Jessica Hinds said that the latest data was "promising", but "unlikely to alleviate concerns that the economic recovery is failing to gain momentum" and showed that France was in "recessionary territory".
Comment on wider economic news, Berenberg economist Holger Schmieding said: "The policies to tackle the euro crisis are paying off. The biggest current concerns in the eurozone are the impact of (Russian President) Putin's aggression against Ukraine on core Europe and the parlous state of France."
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