- Prior 57.0
- Composite PMI 55.2
- Prior 56.3
The growth momentum in Spain’s services sector weakened in October but is still a solid reading nonetheless. Both sales and demand showed improvements, contributing to the strong activity. The added good news is that jobs growth also hit a 18-month high in the latest report. HCOB notes that:
“Spain’s economy continues on its positive trajectory. According to preliminary estimates from the national statistics office
(INE), GDP grew by an impressive 0.8% quarter-on-quarter (QoQ) in the third quarter. While the Composite HCOB PMI
showed a slight slowdown in June and July, it displayed solid growth signals again in September and October. This trend
suggests that growth of up to 3.0% could be achievable for 2024. The HCOB PMIs, in particular in services, indicate a strong
start to the fourth quarter.
“The Spanish service sector remains a significant growth driver. The respective HCOB PMI in October stands well above the
long-term average, reflecting robust activity supported by strong demand from both domestic and international markets. This
demand not only fuels business activity but also heightens labour needs in the sector: companies continue to seek additional
workers to meet the growing demand. The Employment Index reached its highest level in 18 months, underscoring
confidence and momentum in services. Moreover, favourable conditions are boosting companies’ expectations for the
coming months, with continued strong demand anticipated.
“Input price trends remain a critical issue in the Spanish services sector, impacting inflation dynamics. Core inflation, which
excludes energy and food prices, remains above the headline inflation rate and picked up sharply on the monthly rate in
October. This discrepancy illustrates how persistent cost increases in the services sector significantly contribute to higher
core inflation. Rising wages are a primary driver of this trend, with many service companies continuing to report wage
pressures. To mitigate these burdens, companies often pass on the additional costs to consumers, further intensifying price
increases in this sector.”