Spain's services sector expands in January as new business grows, PMI

MADRID (Reuters) - Spain's services sector continued to expand in January, although at a slower pace than in December, as new business volumes rose sharply, according to a survey by S&P Global.

The HCOB Spain Services PMI Business Activity Index recorded a solid 54.9 in January, marking the seventeenth consecutive month of growth in the sector. The strong reading, far above the 50 mark indicating expansion - was down from 57.3 in December.

The services sector saw the sharpest rise in new business since April 2023, driven by strong domestic demand. New exports grew only marginally, reflecting weakness in demand from the other large European countries.

In response to the growth of new businesses, employment in the services sector surged, with staffing levels increasing at the fastest rate since December 2000.

"The labour market situation in Spain's service sector is particularly pleasing. Hard figures point to strong employment growth across the entire Spanish economy," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, in the S&P report.

Service providers remained confident about future growth, with sentiment at its highest since February 2022.

The data seem to show the economy's strong growth continued in the first quarter of this year after growing a faster than expected 3.2% in 2024. The government expects a 2.6% growth this year.

(Reporting by Inti Landauro)

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