The Spanish service sector grew for sixth consecutive month in April as demand, notably in the tourism industry, remained strong despite inflation pressure, a survey showed on Thursday.
S&P Global's Purchasing Managers' Index (PMI) for Spain's services sector, which accounts for around half of economic output, fell to 57.9 from 59.4 in March, still well above the 50 mark that separates growth from contraction.
Even though the indicator was lower than in March, it shows the service sector is going through a historically elevated uplift, S&P Global said. Spanish companies are also upbeat about the year ahead.
"Most other PMI indices, such as new orders, business expectations, sales prices and employment, all increased... suggesting an excellent demand situation," Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said in the S&P Global report.
Both input and output inflation remained high, business people surveyed said during the month, and labour costs were the key contributor.
A sister survey of Spanish factory activity in April, released on Tuesday, showed a contraction.
Spanish economic growth is expected to slow this year. The government has forecast an expansion of 2.1%, following 5.5% growth in 2022. The central bank and many analysts expect to see even slower growth this year. (Reporting by Inti Landauro; editing by John Stonestreet)