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Spain’s service-sector activity accelerated in September to match a three-and-a-half-year high, even as businesses faced sharply higher input costs and a less certain outlook. The S&P Global Spain Services PMI Business Activity Index rose to 58.3 from 57.8 in August, according to survey results released Monday, October 5.
A reading above 50 indicates that activity expanded from the previous month; September’s result therefore signaled continued growth, not a measured percentage increase in output. S&P Global said the reading matched July’s recent high. The third quarter also recorded its strongest average PMI reading in five years, according to Investing.com’s account of the survey.
The data point to a services economy still expanding strongly, but with a mixed set of signals beneath the headline: new business continued to grow and employment rose, while export work fell, cost inflation intensified and business confidence weakened.
Growth spread across services
Survey respondents reported higher activity across the services economy. Consumer services, commercial and professional services, and financial and real estate businesses were among the areas recording gains. Companies attributed stronger activity to increased new work, higher enquiries and firmer market demand.
New business increased for a fifth consecutive month, Reuters reported, although the pace of growth eased to its weakest since June. That distinction matters: the survey still indicated expanding demand, but the pace of fresh order growth was less robust than in the preceding months.
Export business moved in the opposite direction, declining for the first time since May. Firms cited uncertainty connected with the war in the Middle East and spending related to artificial intelligence as factors weighing on export demand. The survey reporting did not quantify the contribution of either factor.
Hiring continued as outstanding work grew
Employment in services increased for a 48th consecutive month, extending a four-year run of job creation. The latest increase was described as marked and above the survey’s long-run average, with higher new business cited as a support for staffing.
Backlogs of work also rose for a fourth month in a row, according to Investing.com’s report on the results. Rising unfinished work alongside ongoing hiring suggests that demand was continuing to generate workloads for firms, though the survey alone does not establish how those trends will affect future output or employment.
Paul Smith, economics director at S&P Global Market Intelligence, said firms remained broadly positive about the year ahead and expected to increase investment and staffing. He also cautioned that slower new-business growth could mean the current pace of activity expansion is not sustained. Overall sentiment fell to a four-month low as geopolitical uncertainty and competitive pressures weighed on expectations.
Costs and selling prices pick up
Input-cost inflation climbed to a six-month high. Firms reported pressure from energy and fuel, labour and salaries, and supplier charges. Service providers responded by raising their own prices, with output-price inflation reaching its strongest level since April, Reuters reported.
The simultaneous increase in costs and selling prices points to renewed price pressure among service providers, but the survey does not show how much of the additional cost businesses passed on to customers. Nor does it provide a direct measure of how the price changes will feed into Spain’s official inflation figures.
Services led composite expansion
The wider S&P Global Spain Composite PMI rose to 56.8 in September from 55.8 in August, its highest reading since December 2024, according to Investing.com. Services remained the main source of expansion even as manufacturing returned to marginal output growth.
The survey responses were collected from September 10 to 25, before the October 5 release. The September results offer a timely view of reported business conditions, rather than a final accounting of economic output. The available reporting did not specify a further publication date or provide additional details about the survey’s underlying response counts.
