Spain's service sector ends 2025 on a high note, PMI shows
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A waiter and waitress chat in front of customers at the terrace of a restaurant in downtown Malaga, Spain, April 1, 2025. REUTERS/Jon Nazca
MADRID, Jan 6 (Reuters) - Spain's service sector ended 2025 with its strongest monthly growth in a year, buoyed by rising sales and increased hiring, in contrast with weaker manufacturing activity, a survey by S&P Global showed on Tuesday.
The HCOB Spain Services PMI Business Activity Index climbed to 57.1 in December from 55.6 in November, marking its highest reading in 2025. The index has held above the 50.0 threshold indicating growth for 28 consecutive months.
December's expansion was driven by improved sales volumes and a boost in new business, particularly from key European markets. Firms also increased staffing at a faster pace, with many new hires on permanent contracts, reflecting confidence in sustained demand.
However, inflationary pressures intensified, with input prices rising at the fastest rate since September due to higher supplier charges, energy costs, and wage pressures. Service providers responded by raising selling prices, although competitive pressures limited their pricing power.
"Spain's private sector economy closed the year on a strong note, driven primarily by the services sector," said Hamburg Commercial Bank economist Jonas Feldhusen. “Looking ahead to 2026, the outlook for services remains upbeat: order books are solid, and recent data suggest that last month’s dip in export orders was likely a temporary blip."
A sister survey on Friday showed Spain's manufacturing sector contracted in December for the first time since April.
The new data underscores the sectoral divergence within Spain's economy, with domestic strength supporting services, while manufacturing faces external challenges. Inflation in services remains a concern for policymakers, as discussed at recent European Central Bank meetings.
(Reporting by Andrei Khalip; Editing by Hugh Lawson)
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