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Spain PMI February 2024

Spain: Spain services sector sees strong growth amid rising costs

The HCOB Spain Services Purchasing Managers’ Index (PMI) rose to 54.7 in February from 52.1 in January, showing the strongest growth since May 2023. As a result, the index remained above the 50.0 no-change threshold, and signaled a stronger improvement in services sector operating conditions compared to the previous month.

This upturn was driven by a notable increase in both service activity and new business, with the latter achieving its best rate in nine months. The surge in demand for services was primarily domestic, as new export business continued to decline. The overall improvement in activity and new work led firms to expand their workforce, continuing a trend of job growth.

On the pricing front, the period saw a sharp rise in operating expenses for service sector firms, primarily due to higher employment costs and challenges in recruiting suitable staff. Additionally, input costs escalated significantly, driven by general supplier price inflation, alongside increased energy and transportation costs, marking the highest rise since May 2023. In response to these rising costs, companies increased their charges. Meanwhile, business sentiment reached a two-year high, buoyed by optimistic forecasts for demand and the initiation of new projects.

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