Euro zone manufacturers reported steady business growth in February, but the strength of the euro is restraining the pace of the upturn, according to a survey of 3,000 companies.
The Reuters Eurozone Purchasing Managers' Index showed slowing growth in new orders and increasing job cuts as manufacturers struggle to keep their export prices competitive.
The headline index for February was 52.5, in line with the consensus forecast and well above the 50 level that divides growth from contraction but unchanged from the January level.
But NTC Research, which compiles the index for Reuters, said the survey could be giving early warning signals that euro strength was impeding the region's economic recovery.
"If we see the euro remaining this strong, the signs from this survey are that will continue to restrict growth," said Mr Chris Williamson, NTC's chief economist.
"If we have indeed peaked where we are at the moment . . . growth is significantly weaker than the peaks we saw [in previous upturns], which is a cause for concern," he added.
The euro's strength has prompted politicians to call for an interest rate cut from the European Central Bank, although the majority of market watchers expect the ECB to hold rates at 2 per cent when it meets on Thursday.