An indicator of private sector performance for the euro area signaled expansion for the fourth straight month in October, but declined unexpectedly from a 27-month high, survey results showed Thursday.

Due to a slowdown in services, the flash composite Purchasing Managers' Index fell unexpectedly to 51.5 from 52.2 in September, Markit Economics said. The reading was expected to rise to 52.4.

The services PMI slid to 50.9 in October from 52.2, while it was forecast to remain unchanged at the September level.

On the other hand, manufacturing activity growth improved slightly in October, with the index rising to 51.3 from 51.1 in September. It was expected to climb to 51.4.

"It's too early to say that the recovery is losing momentum," Chris Williamson, chief economist at Markit said.

"The dip in the PMI will remind policymakers that a sustainable upturn is by no means assured, and adds confirmation to the ECB's view that the recovery is slow, uneven and fragile," says Williamson.