Almost all of the nations covered saw their PMI remain above the 50.0 mark separating expansion from contraction, but only the Netherlands and Spain reported faster rates of growth. In Spain, factory output growth hit a four-year high, rising to 52.9 in May from 52.7 in April – the highest reading since April 2010.
May marks Spain's sixth straight month of growth as new orders continued to increase at a solid rate.
Read MoreEuro zone businesses see strongest quarter in 3 years
Chief economist at Markit, Chris Williamson said the weaker than expected figure will inevitably add to the clamour for policymakers to provide a renewed, substantial boost to the region's economy and ward off the threat of deflation.
"The survey also highlights some encouragingly strong national performances, especially among previously-troubled member states such as Spain and Italy, where productivity improvements and competitive pricing have helped boost sales.These gains suggest that long-term structural reforms are helping to lift demand," said Williamson.
"The main disappointments in the May surveys were in fact found in the core and France in particular is one boat which is not being lifted by the rising tide," he added.
Read MoreManufacturing booms in periphery, unemployment unchanged
Germany, Europe's largest economy saw its manufacturing sector expand at its weakest rate in seven months in May as factory output grew more slowly than the previous month and job creation was almost stagnant.
Outside of the the euro zone, British manufacturing activity kept expanding at a rapid pace as new orders were strong and factories took on more staff.
The Markit UK Manufacturing PMI came in at 57.0 in May, slowing slightly from 57.3 the previous month.
Follow us on Twitter: @CNBCWorld