Euro zone business activity growth weakest since Feb

European business activity slowed in January, with growth at its weakest level since last February, as global growth cools.

"The cooling in the pace of growth in euro area business activity at the start of 2016 is a disappointment but not surprising given the uncertainty caused by the financial market volatility seen so far this year," Chris Williamson, chief economist at Markit said. He added however that it would be "wrong to get too worried".

The start of 2016 was the worst on record for Wall Street and European shares have also seen a torrid start to the new year. The volatility was prompted by concerns over China's ability to manage a slowdown in its economy. Commodity prices have tumbled and the Chinese authorities' response to turmoil in the Chinese stock market led to further panic.

European Central Bank President Mario Draghi told reporters at a press conference Thursday that downside risks had increased at the start of the year. The bank will "review and possibly reconsider" the bank's monetary policy in March, he said.

An employee rubs dye onto the leather uppers of a luxury shoe during the coloring process at the Magnanni factory, operated by Blanco Aldomar SL, in Almansa, Spain
Angel Navarrete | Bloomberg | Getty Images
An employee rubs dye onto the leather uppers of a luxury shoe during the coloring process at the Magnanni factory, operated by Blanco Aldomar SL, in Almansa, Spain

The Markit euro zone PMI index fell from 54.3 in December to 53.5 in January, according to the preliminary estimate.

A drop in oil prices, passed on to consumers in the form of price cuts, failed to accelerate the pace of growth. But the fall should nonetheless help to boost sales in months to come, Markit said.

"Firms also appear to be looking to brighter times ahead, with business confidence improving, linked in turn to backlogs of work rising at the fastest rate since the spring of 2011," Williamson said.