Spain Services Sector Growth Slows in January

The HCOB Spain Services PMI fell to 51.9 in February 2026 from 53.5 in the previous month, the lowest since June and well below expectations of 52.8. New business growth eased, with foreign demand declining for the third time in four months, leaving expansion largely driven by domestic clients. Employment continued to rise, extending the current hiring streak to nearly 3-1/2-years, but job creation was the weakest since September. Some firms chose not to replace departing staff as expectations softened to a 6-month low. Capacity pressures remained limited, with backlogs falling slightly for a third consecutive month. Meanwhile, input prices rose at the fastest rate in a year, reflecting higher supplier charges and wage increases. In response, firms lifted output prices at the sharpest pace since October, marking three straight months of accelerating inflation. Despite expectations of improved activity over the coming year, overall confidence slipped to its lowest level since August.

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.