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Investing.com -- Spain’s service sector continued to expand markedly in November, with the HCOB Spain Services PMI Business Activity Index registering 55.6, according to data released Wednesday.
While this represents a slight decrease from October’s 56.6, the figure still indicates robust growth well above trend levels. The expansion has now continued for 27 consecutive months.
The growth was primarily driven by domestic demand, as new business volumes increased for the fifth straight month. However, international sales declined for the first time in five months, marking the steepest downturn since early 2024.
Despite this international weakness, service providers remained optimistic about future output, with confidence levels holding steady above historical trends. Companies expect market demand to remain positive over the coming year.
Employment in the sector continued to rise at a marked rate, though slightly slower than in October. This hiring helped firms manage their workloads, with backlogs increasing only marginally.
Cost pressures remained elevated in November, with businesses reporting higher labor expenses alongside increased prices for foodstuffs, energy, and fuel. However, selling price inflation softened to its lowest level in a year as companies limited price increases to stimulate sales and responded to client discount requests.
The broader HCOB Spain Composite PMI Output Index, which includes manufacturing, registered 55.1 in November, down from 56.0 in October but still indicating strong growth across the private sector. The services economy continued to outperform manufacturing.
"Spain’s economy remains robust, and GDP is likely to grow strongly in the fourth quarter," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. "The relatively high price indices remain a concern, especially without any alleviation of wage pressures."
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