While the service sector continues to deliver solid growth, albeit slowing slightly compared to June, the manufacturing sector reported the steepest slide in production since April 2013.

"The manufacturing sector has become an increasing cause for concern," said Chris Williamson, an IHS Markit economist.

"Geopolitical worries, Brexit, growing trade frictions and the deteriorating performance of the auto sector in particular have pushed manufacturing into a deeper downturn."

IHS Markit said its composite eurozone PMI fell to 51.5 points in July from 52.2 points in June.

A reading above 50 points indicates an expansion, and the long-term trend appears to be heading towards stagnation.

However, manufacturing fell to 46.4 -- a 79-month low -- from a reading of 47.6 in June.

The disappointing survey data indicate that quarterly eurozone GDP growth will slow to just 0.1 percent in the third quarter, IHS warned.

While services remained in expansion, manufacturing in Germany was in contraction territory, while France stagnated. Both countries make up roughly half of the eurozone GDP.

"With growth slowing, job creation fading and price pressures having fallen markedly compared to earlier in the year, the survey will give added impetus to calls for more aggressive stimulus from the European Central Bank," said Williamson.

Analysts had believed that the ECB was likely to point Thursday to an interest rate cut in September, but the recent data could even mean a move this week.