May’s services purchasing managers’ index – which measures the health of the sector – rose to 52.9 from 52.8 in April. It was higher than a previous estimate of 52.5. A score of over 50 indicates growth.
The service sector has recently been the bright spot in a gloomy Eurozone economy. The 19-member currency bloc has struggled with a global slowdown, Brexit negotiations, and weakness in Germany, its biggest economy.
Solid service sector growth occurred in spite of a slowdown in new business in May, IHS Markit said. Both Germany and Spain saw weaker gains in new work than in the previous month, while it declined in Italy.
However, firms came under some pressure to increase output, which encouraged them to take on new staff. Employment in the sector continued to rise markedly, IHS Markit said.
Business sentiment remained subdued, however, falling to its weakest level in four months. Firms in struggling Germany were the least confident of a rise.
In the Eurozone’s overall private sector, services kept the boat afloat as manufacturing output fell for a fourth successive month, IHS Markit said.
Chris Williamson, chief business economist at IHS Markit, said: “The overall picture remains one of weak current growth and gloomier prospects for the year ahead”
“While the service sector has seen business conditions improve compared to late last year, growth remains only modest,” he said.
Read more: Eurozone inflation falls well below ECB target
“The survey data are merely indicating a modest 0.2 per cent rise in GDP in the second quarter,” he said, adding: “There seems little prospect of any immediate improvement.”