Business activity in the 16 countries using the euro hit an eight-month high this month, a survey showed yesterday, giving a boost to the euro and hopes that the worst of the slump may be easing.

The eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, rose to 43.9 points in May from 41.1 points in April, according to a first estimate.

The index hit a record low of 36.2 points in February.

The latest figures, although an improvement, remain below the boom-bust line of 50 points for a 12th consecutive month in the recession-hit eurozone economy.

The outcome "is another sign of a clear pick-up from the record fall in output seen in the first quarter," Mr Markit chief economist Chris Williamson said.

While companies continued to cut jobs for an 11th consecutive month, the rate of lost jobs eased for the first time since the beginning of the crisis, even if the improvement was only slight, Markit said.

Mr Williamson said this was an "encouraging" development.

The service sector PMI rose to 44.7 points in May, its highest level in seven months, from 43.8 points in April. For manufacturers, the PMI jumped to 40.5 points, another seven-month high, from 36.8 points in April, with the gain the largest on record.