Euro zone business activity picks up in 2015

QE will work, it's big: ECB's Coeuré
QE will work, it's big: ECB's Coeuré   

Business activity in the euro zone ticked up in January, a closely-watched survey showed Friday, a day after the European Central Bank (ECB) unveiled a massive bond-buying program in an effort to boost the region's economy.

The composite reading of Markit's flash Purchasing Managers' Index (PMI) for the euro zone in January came in at 52.2. This was better than the 51.8 figure expected by analysts, and an uptick from December's 51.4. A reading over 50 marks expansion.

The data will be met with relief in Europe, amid growing concerns about the health of the euro zone's economy. Official figures released earlier this month revealed that the region slipped into deflation for the first time since 2009 in December.

Read MoreAfter QE, Europe still has a lot of work to do

As a result, ECB President Mario Draghi on Thursday announced a bigger-than-expected bond-buying – or quantitative easing (QE) – program on Thursday.

Jennifer McKeown, senior European economist at Capital Economics, said the PMI data -- although positive -- pointed to "very slow growth."

"(They) confirm that the ECB's latest policy support is sorely needed," she said in a note. "The index points to very weak quarterly GDP (gross domestic product) growth of around 0.2 percent, similar to the rates recorded in the second half of last year."

The Image Bank | Getty Images

Draghi said the central bank would launch a private and public quantitative easing (QE) program, buying 60 billion euros of bonds a month from March.

The plan will run until September 2016, Draghi said at press conference at the ECB headquarters in Frankfurt and bonds issued by European institutions will be subject to risk-sharing, he said.

Speaking to CNBC on Friday from the World Economic Forum in Davos, Switzerland, ECB Executive Board Member Benoit Coeure said the bond-buying program wouldsays help boost inflation in the euro zone.

"It will work because it is big, because it's strong, and because it's open-ended," he told CNBC.

On a country-by-country basis, the PMI data revealed that business activity in Germany expanded slightly more than expected. However, it slipped in France, "implying that the euro-zone's second largest economy remains at risk of recession," McKeown added.

Germany's composite PMI rose to 52.6 in January, from 52.0 in December. Whereas France's reading slipped to 49.5, from 49.7 the month before.

-- By CNBC's Katrina Bishop. Jenny Cosgrave also contributed to this report.