Eurozone economic confidence improved in January, marking the first increase since March 2011, driven largely by rising confidence in services, a survey carried out by the European Commission showed Monday.

The corresponding indicator rose to 93.4 from 92.8 in December. Economists had forecast an increase to 93.8 from December's original score of 93.3.

While this is a boost for hopes that Eurozone economic activity may be stabilizing, the fact remains that sentiment is still at a low level and the Eurozone is far from out of the economic woods, IHS Global Insight's European economist Howard Archer said.

Industrial confidence remained unchanged in January compared to the revised reading of -7.2 of December. The reading was forecast to rise to -6.8 from December's initial reading of -7.1.

Sentiment in construction increased to -28.3 from -28.9 in December. The sentiment in services rose to -0.6 from -2.6 in the previous month, thanks to more positive assessments of the past business situation, past demand and expected demand.

Retailers' confidence, meanwhile, dropped to -15.5 from a revised -12.2 in the previous month. Managers revised their employment intention upwards in all business sectors except for retail.

Consumer confidence rose to -20.7 in January, mainly on the back of easing unemployment fears. Consumers' assessment of the expected general economic situation and their own financial situation remained unchanged at the euro-area level.