"Manufacturers appear to be benefiting increasingly from a sustained easing of sovereign debt tensions, reducing uncertainty and lifting business confidence," said Howard Archer, chief European economist at IHS Global Insight. "If this continues, businesses should become increasingly more prepared to place manufacturing orders that have been delayed or cancelled."
Further good news emerged with Eurostat reporting that inflation in the eurozone fell to 2 percent in the year to January, well below expectations for a modest increase from the previous month's 2.2 percent. As a result, prices are rising more or less in line with the European Central Bank's mandate of "close to, but below 2 percent."
The figures may prompt speculation that the ECB could cut borrowing costs further at its next rate-setting meeting on Thursday. Currently, its benchmark rate is at its record low of 0.75 percent and many economists argue that it should be cut further to help stimulate the ailing economy of the eurozone.