The eurozone economy showed unexpected signs of fragility in May, a key survey said Thursday, in a blow to hopes of a swift recovery and despite a welcome increase in employment levels.
The closely watched Markit Economics Composite Purchasing Managers Output Index (PMI) fell to 53.4 points in May from a revised 53.9 points in April.
Although the report showed the single currency bloc holding above the 50-point boom-or-bust line, Markit said the second month running of decline in growth momentum was a sign that unprecedented stimulus measures by the European Central Bank had yet to take effect.
In March, the ECB embarked on a vast bond-buying programme known as quantitative easing or QE with the aim to jolt the eurozone economy out of the doldrums.
"At the moment the extent of the slowing is not a major concern, but will no doubt be causing some nail-biting at the ECB as policymakers await signs that quantitative easing is the panacea the region needs to achieve a robust and sustainable recovery," said Chris Williamson, Chief Economist at Markit.
But Markit also said that despite the unexpectedly low result for May, eurozone companies were boosting staffing levels at a faster pace.
"Job creation is running at the highest rate for four years as employers remain upbeat about the business outlook, especially in manufacturing where the weaker euro appears to be helping drive strong export sales," Williamson added.
By country, Germany showed the slowest growth in business activity in four months, while France pushed up only marginally from zero-growth levels.
Encouragingly however, France showed its best spell of hiring in over three years, Markit said.
The official unemployment level in the eurozone stands at 11.3 percent and Thursday's data indicates that this should fall further in the coming months.
The eurozone's smaller economies were once again the main spurs in improved business activity across the single currency bloc, Markit said.
The PMI for the services sector, which accounts for about two-thirds of all economic activity, was at 53.3 in May against 54.1 for April.
For manufacturing it was at a 13-month high of 52.3 in May against 52.0 the month before.