The European Commission reported the Business Climate Indicator (BCI) for the euro area fell to 1.05 in July from 1.16 in June. Economists had forecast the indicator would slide to 1.12.

"While managers' production expectations, as well as their appraisals of overall order books and the stocks of finished products remained broadly stable, their views on export order books and, in particular, past production deteriorated," the report said.