Spain's services sector activity grew in January at the fastest pace in six months mainly on the back of domestic demand, prompting companies to hire more staff, a survey showed on Monday.

The HCOB Spain Services Purchasing Managers' Index (PMI) compiled by S&P Global rose to 52.1 from 51.5 in December. The indicator has been above 50 - the line separating growth from contraction - every month since November 2022 except last August.

Spain's services sector, which includes the tourism industry in one of the world's most-visited countries, accounts for around half of economic output.

"Spain once again underscores its current strength among the major European economies," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, in the S&P report.

Spain's economy expanded 2.5% in 2023, outperforming its euro zone peers. Italy and France grew 0.7% and 0.9% respectively, while Germany contracted 0.3%. The Spanish government expects economic growth to slow to a still solid 2% this year.

Service providers ramped up their hiring, which resulted in higher wage costs, adding to overall costs for most businesses, the survey showed.

The consistent growth in services contrasts with manufacturing activity, which has been contracting for the past ten months. (Reporting by Inti Landauro; Editing by Toby Chopra)