Spain Services Activity Surprises on the Upside

The S&P Global Services PMI rose to 58.3 in September 2026, from 57.8 in August, beating expectations of 56.8 and matching July’s peak, the strongest performance since May 2023. Growth was broad-based, led by Consumer Services, Commercial & Professional Services, and Financials & Real Estate. New business increased for a fifth consecutive month, although growth slowed, while exports fell for the first time since May amid concerns over the Middle East war and AI-related spending. Job creation continued and at a marked pace, extending the employment growth streak to four years. Meanwhile, firms faced stronger cost pressures. Input-cost inflation surged to a six-month high, driven by higher energy, fuel, labour and supplier costs. Output-price inflation also accelerated, reaching its strongest level since April. Looking forward, sentiment regarding the outlook softened to a four-month low due to geopolitical uncertainty.

The S&P Global Services PMI eased to 57.8 in August 2026 from 58.3 in July and missing analysts' forecasts of 59 but remaining firmly in expansionary territory. The reading was the second-highest in nearly three and a half years, pointing to continued solid growth. New business rose for a fourth month on robust domestic demand, while export growth remained modest amid geopolitical uncertainty. Employment continued to rise, though hiring slowed to a four-month low as some firms did not replace leavers. This reflected some reluctance to expand workforces, with firms turning increasingly to technology to boost productivity amid rising labour costs. Input price inflation eased to its lowest since January but remained elevated due to higher energy, fuel and wage costs. Output charges were raised more quickly than in July. Business confidence fell to a three-month low and remained below trend despite hopes for improving geopolitical and macroeconomic conditions.

The S&P Global Services PMI rose to 58.3 in July 2026 from 54.2 in June, its highest level since March 2023 and well above market expectations of 54.9. Business activity expanded at one of the fastest rates in nearly five years, supported by the strongest increase in new orders since January 2025, largely driven by robust domestic demand and successful product launches and commercial initiatives. Firms responded by accelerating hiring, with employment growth reaching its highest level since January, although workloads continued to outpace capacity, resulting in a further increase in backlogs. On the cost side, input price inflation eased to its lowest level since February despite continued increases in energy, fuel, and labour costs. At the same time, competitive pressures limited firms’ pricing power, with output price inflation slowing to its weakest pace since early 2021. Although business confidence remained positive, sentiment softened amid lingering political uncertainty.