Europe’s floundering economy probably perked up in January, although sharply slowing growth among Chinese services companies suggests the world economy started 2012 in mixed form, according to business surveys on Friday.

Still, there were plenty of bright spots from Friday’s series of purchasing managers indexes (PMIs), which measure changes in the activities of companies all over the world. Britain’s service sector expanded at its fastest pace in 10 months in January, exceeding every expectation, while activity in Indian and Russian services companies grew at the fastest pace in six months.The eurozone’s vast services economy snapped four months of decline by expanding last month, albeit very weakly. The PMIs suggested that a recession there, widely expected by economists, will be mild. And US jobs and PMI data later on Friday should show continued steady progress in the world’s No.1 economy, according to analysts polled by Reuters. “All in all, the improvement in the services PMI index is seen as a sign that the (eurozone) economy is not as depressed as some have feared,” said Annalisa Piazza, economist at New Edge Strategy.

Business and consumer sentiment surveys from the eurozone since the start of the year have shown a definite upturn in optimism, although hard data still point to profound economic weakness in the common currency area.

Retail sales during December, including the busy shopping period after Christmas, fell some 1.6 percent compared with a year earlier, suggesting some of the optimism may be of the frothy kind. Economists also warn that developments in the eurozone debt crisis are still critical to the bloc’s economic outlook. Greece at least looks likely to avoid a ruinous sovereign debt default by agreeing a debt swap deal and a new bailout with the International Monetary Fund, although market focus is shifting back to Portugal and its long-term solvency. News from China earlier on Friday qualified any optimism that the global economy started this year with a strong bounce. China’s official government services PMI dipped to 52.9 in January from 56.0, suggesting sharply slowing growth, although that was still comfortably above the 50 mark that denotes expansion. That followed manufacturing PMIs on Wednesday that showed activity in China’s factories expanded only very slightly in January. Both the services and manufacturing data suggest that Chinese authorities will take further policy measures to support growth. “The overall strength of economic growth remained relatively weak, which will inevitably weigh on the jobs market if weakness persists for longer,” said Qu Hongbin, chief economist for China at HSBC.

3 February 2012 / REUTERS, LONDON