Business activity in the eurozone slowed further in July, signalling a "near-stagnation" as the economy is weighed down by weakness in the manufacturing sector, a key survey showed Wednesday.

The HCOB Flash Eurozone purchasing managers' index (PMI) published by S&P Global recorded a figure of 50.1, down from 50.9 in June and its lowest level in five months.

Any reading above 50 indicates growth, while a figure below 50 shows contraction.

"Is this the summer lull? It feels a bit like it as the Eurozone economy barely moved in July," Cyrus de la Rubia, chief economist at Hamburg Commercial Bank (HCOB).

"The situation deteriorated significantly in the manufacturing sector and counteracted moderate growth in the services sector," he added.

Manufacturing activity slid to 45.6 from 45.8 a month earlier, a seven-month low.

Despite the data, de la Rubia said "growth in the third quarter is still on the cards".

The eurozone's two biggest economies, Germany and France, "continued to underperform the wider region", HCOB said, with both recording a contraction in activity in July.

Germany's PMI fell to 48.7, significantly down from 50.4 but France's economic activity recovered to reach 49.5 in July, up from 48.2 a month earlier.

De la Rubia said "while Germany is seemingly struggling to grow, the French economy is being fuelled by the Olympic Games".

Economists said the data pointed to a sluggish recovery for the eurozone.

"While improving business sentiment in the first months of the year as well as better-than-expected GDP growth in the first quarter had supported hopes of a surprise recovery of the eurozone economy, the latest developments have proved to be something of a cold shower for those expectations," ING Bank's Carsten Brzeski said.