Spain's Service Sector Growth Remained Strong in October
MADRID - Spain's services sector continued to grow in October, supported by strong sales and demand, as indicated by the latest PMI figures. The S&P Global HCOB Spain Services PMI came in at 54.9 for the month. While this marks a slight decline from 57.0 in September, it remains well above the neutral level of 50.0 that separates growth from contraction. This signifies the 14th consecutive month of growth for the sector.
The performance of the services sector was bolstered by active marketing efforts, an increase in employment, and a continued rise in new business for the 11th consecutive month. Additionally, the sector saw a robust increase in new export orders, marking an eight-month period of growth.
According to Hamburg Commercial Bank economist Jonas Feldhusen, the Spanish services sector plays a crucial role in the country's positive economic trend. Feldhusen highlighted the Employment Index, which reached its highest level in 18 months, as a sign of confidence and momentum within the sector.
As companies expanded their workforce to meet rising demand and replace departing employees, employment rates sharply increased. Despite the increase in staff, the sector experienced capacity pressures due to a backlog of work for the 10th consecutive month.
The sector also faced accelerated input price inflation, primarily driven by higher wage costs, which in turn led to an increase in selling prices. This inflationary pressure is contributing to a core inflation rate that remains above the headline rate.
Looking ahead, businesses in Spain's services sector are optimistic about the future. They foresee favorable market conditions and are planning additional commercial activities to promote growth over the coming year.
Earlier this week, a related study revealed that Spain's manufacturing sector experienced its fastest expansion in over two years in October. Additionally, data released last week by Spain's statistics agency showed that the economy grew by 0.8% in the third quarter. This rate exceeded economists' expectations and outperformed the eurozone's growth rate of 0.4%.