(Adds detail, background, reaction)
* Euro zone services recovery stalls in June
* Factory recession eases, but long way back to growth
* Orders to inventory ratio highest since Nov 2007
By Nigel Davies
LONDON, June 23 (Reuters) - The euro zone is still on course to start recovering late this year from its worst-ever recession, but key private-sector surveys indicated on Tuesday that meaningful growth was unlikely to return before next year.
The surveys, published after a sharp sell-off on world stock markets on Monday triggered by investor nervousness over the durability of the global recovery, suggested that still-rising unemployment remains a barrier to service-sector businesses.
The widely watched Markit Eurozone Flash Services Purchasing Managers Index (PMI) unexpectedly slipped to 44.5 in June from 44.8 in May, the first fall since February, and still well below the 50 mark separates growth from contraction.
Some analysts have talked about the possibility of a "W-shaped" economic recovery -- a second round of shrinkage after the sharp contraction in the first quarter of this year -- based on fears of high corporate indebtedness and growing unemployment restraining demand.
But most were still optimistic, however, that the economy would stabilise later this year, with June's weaker PMI reading seen as a hiccup rather anything nastier.
Factories saw the outlook improve further in June from dire levels as they run down stocks of goods and see a slowdown in the pace at which orders have been falling.
"It's still pointing to stabilisation by the end of the year," said Juergen Michels at Citi. "We still pencil in a positive reading for GDP in the fourth quarter."
Markit said its latest data pointed to the economy contracting between 0.5 and 0.6 percent in the second quarter. But that follows a staggering 2.5 percent contraction in the first three months of the year.
Yet the data also showed a significant divergence in the performance of its two major economies.
The combined index for the services and manufacturing sectors rose to its highest in a year in France, but its services sector contracted faster in June, in line with a reported 0.2 percent fall in French consumer spending in May.
Meanwhile, Germany's PMI fell as its services economy contracted much faster than expected. That raised the possibility the German economy would see no growth at all in any quarter this year, Markit said.
The tone of the forward-looking figures were largely in line with the latest German Ifo index, which showed on Monday that business sentiment rose to a seven-month high even as current conditions worsened.
Nevertheless, an unexpected rise in the GfK consumer sentiment indicator for July to 2.9 from 2.6 in June gave encouraging signals for Germany next month.
BETTER TO COME
There were signs of improvement ahead despite the slip in the services PMI. The index measuring business expectations jumped nearly three points to its highest since July 2007.
That brightening outlook may have contributed to a rise in employment indexes. While job losses continued to mount in the past month, the pace eased.
However, unemployment is expected to climb even further in coming months. Official unemployment in the euro zone hit its highest in nearly 10 years in April at 9.2 percent and is widely expected to break through the 10 percent mark.
There were some encouraging signs for the region's factories, which again ran down inventories at a rapid rate.
The flash Manufacturing PMI rose to 42.4 from 40.7 in May, its highest level since last September and just up on the 42.3 predicted by economists.
The orders to inventory ratio, a key gauge of pressure on companies to raise production, jumped again in June. (Editing by Andy Bruce)