Eurozone activity picked up sharply in August to a 26-month high as the battered economy climbed out of a damaging recession, a closely watched survey showed on Thursday.

Analysts said the report confirmed that the 17-nation eurozone was finally turning the corner after a downturn made worse by a debilitating debt crisis cost millions of jobs and tested the single currency bloc to the limit.

But there was some concern that France, ranked second to powerhouse Germany in the eurozone, continued to struggle and actually slipped back.

The Composite Purchasing Managers’ Index compiled by Markit Economics jumped to much better-than-expected 51.7 points in August from 50.5 in July, pushing further beyond the 50-points boom-or-bust line.

Analysts polled by Dow Jones Newswires expected an August reading of 51 points after the Composite PMI moved into positive territory in July for the first time in 18 months.

Markit said its separate PMI for the services sector ― which accounts for the bulk of economic activity ― rose to 51 in August for a 24-month high, from 49.8 in July. (AFP)