Spain Services PMI

The HCOB Spain Services PMI climbed to 57.3 in December 2024, up from 53.1 in November, significantly exceeding market expectations of 54.1. This marked the sixteenth consecutive month of expansion and the strongest growth since April 2023. The growth was underpinned by robust underlying demand and a normalization of market activity following the disruptive effects of the Depresión Aislada en Niveles Altos (DANA) weather phenomenon. Employment expanded for the 27th consecutive month, reflecting ongoing strength in the labor market. On the price front, input costs rose to a five-month high, fueled by increased wages, supplier charges, and higher fuel prices. In response, service providers passed on these rising costs to clients, resulting in output price inflation at a six-month high. Looking ahead, business confidence strengthened in December, with overall optimism reaching its highest level since May 2024.

The HCOB Spain Services PMI dropped to 53.1 in November 2024, down from 54.9 in October and slightly below the expected 53.2. While still indicating growth in the service sector, the pace has slowed, marking the weakest expansion since January. This slowdown was partly due to the impact of flooding from a weather phenomenon, which limited growth in both activity and new business. Despite this, firms remained optimistic about the future, adding staff to manage increased workloads. On the price front, input costs continued to rise, driven by higher wages, although output charges increased at the slowest rate since August 2021. Looking ahead, companies expect continued growth over the next 12 months, driven by economic optimism and planned commercial activity.

The HCOB Spain Services PMI fell to 54.9 in October 2024, from a one-and-a-half-year high of 57 in September, falling short of market expectations of 56.8. Nonetheless, this marked the fourteenth consecutive month of expansion, indicating sustained growth. New business orders rose for the eleventh straight month, driven by effective marketing and robust demand both domestically and internationally. In response, firms continued to expand their workforce, with staffing levels reaching their highest since April 2023, though capacity pressures remained, with backlogs of work rising for the tenth month in a row. On the pricing front, input costs surged well above trend levels, mainly due to salary increases, leading firms to pass on these costs to clients through higher output charges. Lastly, confidence for the year ahead remained strong, with firms expecting planned commercial initiatives and facility expansions to boost activity over the next 12 months.