Activity in Spain’s services sector grew at the fastest pace in six months in January, mainly on the back of domestic demand, prompting companies to hire more staff, a survey showed on Monday.
The HCOB Spanish Services Purchasing Managers’ Index (PMI) compiled by S&P Global was 52.1, up from 51.5 in December. This index has exceeded 50 (the threshold between growth and contraction) every month since November 2022, except for August last year.
As one of the most visited countries in the world, the services sector, including tourism, accounts for about half of Spain’s economic output.
“Spain once again underlines its current strength among Europe’s major economies,” Jonas Feldhusen, junior economist at Hamburg Commercial Bank, said in an S&P report.
Spain’s economy expanded by 2.5% in 2023, outpacing eurozone countries. Italy and France increased by 0.7% and 0.9%, respectively, while Germany decreased by 0.3%. Spain’s government expects economic growth to slow to a still robust 2% this year.
The survey showed that as service providers hired more people, labor costs rose and overall costs increased for most companies.
The consistent growth in services contrasts with manufacturing activity, which has continued to contract over the past 10 months. (Reporting by Inti Landauro; Editing by Toby Chopra)