Industrial output in the eurozone grew at the strongest pace for more than two years in August, figures have shown.

Factories in the 17-country bloc saw output rise by 1% in the month, which was better than analysts' forecasts.

The figures showed that the highest increase was registered in Portugal, where output grew by 8.2%.

Europe's economic powerhouse, Germany, saw output rise 1.8%, while French output increased by 0.2% following three consecutive months of decline.

However, output in Italy fell by 0.3%. This was the second decline in a row, as Italy's economy continued to falter.

Germany, France and Italy make up two-thirds of the overall production figure for the eurozone.

'Slowly recovering'

Chris Williamson, chief economist at the researchers Markit, said that while the figures were encouraging there was still cause for concern over the strength of the bloc's recovery.

While production had rebounded in August, he noted that this "merely brings output back to June's level, which was still some 12.5% below its pre-crisis peak".

However, he added that the upturn is "an encouraging sign that the sector is slowly recovering".

"Policymakers will be encouraged by the ongoing recovery trend, but will be reminded of the huge surplus of capacity that persists compared to before the crisis struck."

In August, the eurozone emerged from an 18-month recession, after reporting growth of 0.3%.

However, economists have cautioned that growth and manufacturing figures will remain choppy, and that the recovery from recession is far from secure.

Earlier this month, European Central Bank president Mario Draghi said that the economic recovery in the eurozone remained "weak, fragile, uneven".