Business activity expanded strongly in the eurozone in July, according to the region's purchasing managers, but slowed for the second-successive month as new orders and backlogs dipped.
Despite easing from recent highs, IHS Market's monthly purchasing managers' index (PMI) remained at an "elevated level" by historical standards and "signalled one of the strongest expansions seen in the past six years".
The composite PMI, which measures levels of business activity, including order books, work backlogs and employment, in both services and manufacturing, eased to 55.8 in July, from 56.3 in June and lower than forecasts of 56.2.
Although the headline index slipped, IHS Markit said the survey data was consistent with a quarterly GDP growth rate of 0.6% in the second three months of the year.
Services and manufacturing
Separately, the services PMI remained at 55.4, unchanged from the June reading, but missing forecasts of a rise to 55.5. Manufacturing PMI dipped to 56.8 from 57.4, shy of analysts' estimates of 57.2.
Both sectors experienced robust growth in new orders in July, but a slower pace than in June.
There was a similar impact on backlogs of work and employment, which saw slowing rates of growth, but "only modestly below” recent six-year peaks.
“It’s too early to know for sure whether the economy has merely hit a speed bump or whether the upturn is already starting to fade," said Markit's chief business economist Chris Williamson.
He added: "The evidence so far points to the former, with the economy hitting bottlenecks due to the speed of the recent upturn."
Questions remained, however, over whether the data remained robust enough to concern interest rate hawks at the European Central Bank.
Clause Vistesen, chief eurozone economist at Pantheon Macroeconomics said: "The PMIs continue to signal that growth remains strong enough to propel employment growth, indicating that the business cycle upturn remains resilient."
The growth element of the policy puzzle was described as "robust" throughout the PMI report, but inflationary pressures appeared to remain at bay.
While input prices continued to rise, lower manufacturing and labour costs ensured that net costs were at their lowest since November.
"The slowing pace of economic growth signalled by the surveys and the accompanying easing of price pressures adds to the belief that ECB policymakers will be in no rush to taper policy," added Williamson.