Published by Global Banking & Finance Review®
Posted on March 4, 2026
2 min readLast updated: April 2, 2026
Add as preferred source on GoogleSpain’s services sector continued expanding in February, but at its slowest pace since last June (PMI 51.9). New business was weak, exports fell, and cost pressures surged—driving the sharpest increase in input and output prices in a year.
MADRID, March 4 (Reuters) - Spain's service sector continued to grow in February, albeit at a slower pace, as demand softened and cost pressures intensified, an S&P Global survey showed on Wednesday.
The HCOB Spain Services PMI fell to 51.9 last month from 53.5 in January, marking its lowest level since June. PMI readings above 50 indicate expansion, while those below point to contraction.
The slowdown in growth was attributed to a cooling in market conditions, with new business volumes rising at their weakest rate since mid-2025.
New export business declined for the second consecutive month, reflecting cautious spending by foreign clients amid macroeconomic uncertainties.
Employment in the service sector increased, extending a nearly 3-1/2-year growth period. However, the rise was the softest since last September, as some firms opted not to replace departing staff due to slower demand growth.
Cost inflation surged to its highest in a year, driven by increased vendor prices and higher salaries. In response, service providers raised their output charges at the fastest rate since last October.
Looking ahead, firms remain cautiously optimistic, expecting growth from new projects and marketing efforts. However, overall confidence fell to its lowest since last August, with concerns about a broader economic slowdown impacting expectations.
"The Spanish private sector economy is continuing to lose growth momentum," said Hamburg Commercial Bank economist Jonas Feldhusen.
"The service sector is losing steam, with market demand cooling since the beginning of the year, especially in foreign new business," Feldhusen said.
He added that price dynamics remained a concern, with input price inflation accelerating to its fastest pace in a year.
(Reporting by David Latona; Editing by Hugh Lawson)
The HCOB Spain Services PMI fell to 51.9 in February, down from 53.5 in January.
Growth slowed due to softer demand, rising input costs, and a decline in new export business.
Cost inflation surged to its highest in a year, driven by higher vendor prices and salaries, leading service providers to raise output charges.
Firms remain cautiously optimistic about growth from new projects, but overall confidence is at its lowest since last August due to economic concerns.
Employment continued growing but at its softest rate since September, as some firms did not replace departing staff.
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