HIS Markit said the PMI, alongside the April reading, pointed to second quarter growth of 0.4 percent, weaker than the 0.6 percent prediction in an April Reuters poll.
A composite output price index fell to an eight-month low of 53.0 from 53.4. Euro zone inflation slowed to 1.2 percent in April, official data showed last week, moving further away from the ECB's two percent target ceiling.
Despite those easing price pressures, a PMI covering the bloc's dominant service industry slumped to 53.9 from 54.7, missing expectations for a gentle slide to 54.6.
That was its lowest reading since the start of 2017 and below all poll forecasts.
With new business growth slowing, and firms building up backlogs of work at a slower pace, optimism fell to a nine-month low. That sub-index fell to 64.4 from 66.2 in April.
It was a similarly disappointing month for manufacturers. The flash factory PMI missed expectations for a modest dip to 56.0 from 56.2, instead coming in at a 15-month low of 55.5.
An index measuring output, which feeds into the composite PMI, fell to an 18-month low of 54.5 from 56.2.
Optimism also fell among factory managers too, slowing their hiring growth to the slowest pace for nine months. The employment index dipped to 55.5 from 56.6, a nine-month low.
But consumer confidence in the bloc likely held steady this month, a flash estimate from the European Commission is expected to show later on Wednesday.