Eurozone private sector business activity slowed sharply in January against a backdrop of volatile financial markets and uncertainty about the global outlook, a key survey showed Friday.

Data monitoring company Markit said its closely watched Composite Purchasing Managers Index (PMI) fell to 53.5 points in January from 54.3 in December, hitting an 11-month low.

The reading was still well above the 50-point boom-or-bust line, showing the 19-nation eurozone economy continued to expand overall.

Markit chief economist Chris Williamson said "the cooling of 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."

"It would be wrong to get too worried," Williamson said, saying the report was consistent with overall quarterly growth of 0.3-0.4 percent.

According to the latest official data available, the eurozone expanded 0.3 per cent in the three months to September, after 0.4 percent in the second quarter.

Williamson said business confidence appeared to be improving, and employment prospects were resilient.

For the services sector, which accounts for about two-thirds of all activity in a developed economy, Markit said its January PMI fell to 53.6 points from 54.2 in December.

The manufacturing sector PMI dropped to 52.3 points from 53.2.
A sharp slowdown in China, the world's second largest economy, has spooked markets and stoked doubts over the outlook.

European Central Bank head Mario Draghi said Thursday "downside risks" had increased and he was ready to do everything required to keep the eurozone economy on track.

Analysts said Friday's PMI report added to the concern but the gloom should not be overdone.

Howard Archer at IHS Global Insight said the figures were weaker than expected "and raise concern that heightened global economic uncertainty and financial market turmoil are weighing down on a relatively fragile Eurozone cyclical upturn."

"Nevertheless, the (reports) ... are far from disastrous and they still show reasonable new business growth, rising backlogs of work and decent employment growth," Archer said in a note.