The Eurozone services purchasing managers' index (PMI) rose to 48.9 in June, surpassing market consensus and signaling a slower-than-feared deterioration in the sector.
The reading improved from 47.7 in May, beating the 48.6 forecast expected by analysts according to Bloomberg.
1% in the first quarter of the year, highlighting the fragility of growth across the bloc.
While the figure remains below the 50-point threshold that separates expansion from contraction, the upward momentum suggests the sector is stabilizing rather than accelerating into a deeper slump.
This development provides a modest counterweight to broader concerns about the euro area's economic trajectory.
Preliminary data released earlier this week showed the euro zone economy expanded by a meager 0.1% in the first quarter of the year, highlighting the fragility of growth across the bloc.
The services sector, which accounts for a significant portion of the region's GDP, is therefore a critical indicator of whether the economy can avoid a technical recession.