MADRID (Reuters) - Spain's services sector grew in February at the fastest pace since May 2023 as optimism about the future rose to the highest level in two years, a survey showed on Tuesday.
The HCOB Spain Services Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 54.7 from 52.1 in January. The indicator has been above 50 - the line separating growth from contraction - every month since November 2022 except last August.
"It appears that Spain is currently undergoing a demand-driven upswing," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, adding that while this underscored the country's resilience, "impulses from abroad remain restrained".
Spain's economy expanded by 2.5% in 2023, outperforming its euro zone peers. The Spanish government expects economic growth to slow to 2% this year.
The upturn in activity last month mirrored the rise in new business, the survey showed.
However, that growth largely emanated from domestic sources, as new export business declined in February for a seventh successive month, with some reports of political and economic uncertainty weighing on foreign sales.
The consistent growth in services contrasts with manufacturing activity, which had been contracting for almost a year until reversing course in February, when it recovered to 51.5 thanks to an uptick in domestic demand.