Spain Services PMI Expands Less than Expected

The HCOB Spain Services PMI fell to 53.5 in January 2026 from December’s 12-month high of 57.1, well below market expectations of 56.6. The latest reading signaled the weakest pace of expansion in services activity since August, though growth remained solid overall. New business growth also eased to its slowest since June, while export sales declined for a second time in three months, with firms pointing to weaker demand from key European markets. Employment growth remained strongly positive and picked up from December, reaching its highest level since last March. On the price front, input cost inflation stayed elevated, with companies citing higher costs for computer hardware and components as well as rising labor expenses, while selling prices increased at the fastest pace in three months. Finally, business sentiment improved slightly, climbing to a ten-month high.

The HCOB Spain Services PMI climbed to 57.1 in December 2025, up from 55.6 in November and well above market expectations of 54.5. The reading signals the fastest expansion in services activity since December 2024, extending the sector’s growth streak to 28 consecutive months and remaining firmly above its long-term trend. Growth was underpinned by stronger inflows of new business and commercial work, reflecting improving underlying demand. Export sales also increased, supported by rising orders from key European markets. At the same time, backlogs of work fell for the first time in six months, while employment grew at an accelerated pace as firms responded to higher activity levels. On the price front, inflation reached a three-month high, driven by higher supplier charges and increased energy costs. Companies passed on part of these pressures, leading to a solid rise in selling prices. Finally, business confidence strengthened notably, reaching its highest level since March 2025.

The HCOB Spain Services PMI fell to 55.6 in November 2025 from a ten-month high of 56.6 in the previous month, missing market expectations of 56.1. New business volumes continued to grow for the fifth consecutive month, though at the slowest pace since August, weighed down in part by a decline in international sales, which fell in November for the first time in five months. Meanwhile, employment remained robust as firms continued to add staff to support increased activity and maintain control over overall workloads. On the price front, input costs stayed elevated due to higher labor expenses, while output charges eased to its lowest level in a year as companies offered discounts and incentives to stimulate sales. Despite these challenges, service providers remained cautiously optimistic about future activity. Confidence was largely unchanged from October and continued to sit above its historical average.