MADRID (Reuters) -Spain’s service sector growth slowed down in August although it maintained a solid pace thanks to strong demand that allowed firms to raise prices, S&P Global reported on Wednesday.
The headline HCOB Spain Services PMI fell to 53.2 in August from 55.1 in July, but higher than the 51.9 and 51.3 in June and May. A reading above the 50.0 threshold indicates growth.
The sector’s expansion was driven by a positive demand environment, with firms experiencing higher sales volumes and a modest increase in new export business. Some companies attributed the rise in new work to the release of previously delayed contracts.
“The service sector remains in solid shape,” Hamburg Commercial Bank economist Jonas Feldhusen said. “Supported by strong sales and sustained demand, companies felt confident in passing (rising) costs on to clients through higher end prices,” he said.
The solid performance of the service sector, which accounts for almost half the country’s gross domestic product, suggests the economy has sustained its pace of growth into the third quarter.
A sister survey released earlier this week showed the manufacturing sector expanded in August at the fastest pace in 10 months.
Spain’s economy outpaced other large economies in the euro zone with 0.7% growth in the second quarter, statistics department INE said in July. The government expects 2.6% growth for the year as a whole.
(Reporting by Inti Landauro; Editing by Hugh Lawson)
