Spanish services sector grows at fastest pace in over six years

Spain’s services sector, which accounts for over half of GDP, saw the fastest growth in activity in the first month of the year since July 2007, cementing expectations of a recovery in the economy this year, according to a survey released Wednesday by consultant Markit.

Companies in the sector also increased their staffing levels slightly in January, ending a run of 70 consecutive months of job cutting.

Markit's Purchasing Managers' Index (PMI) climbed from 54.2 points in December to 54.9 points in the first month of 2014, marking the third successive month in which the index stood above the 50-point mark that denotes expansion. The increase in the month was also the strongest since before the current crisis took hold around the start of 2008.

All six of the market segments surveyed by Markit posted increases in activity, led by transport and storage. Companies were upbeat about an improvement in economic conditions this year, in which Economy Minister Luis de Guindos has predicted that output could rise by 1.0 percent. Business confidence looking a year ahead was also at its highest level since July 2007.

“The Spanish services sector backed up the solid performance seen in December with accelerated growth of activity in January, while we even saw an end to job shedding in the sector for the first time since the economic crisis began,” Markit senior economist Andrew Harker said in the report. “Companies (…) are increasingly optimistic that 2014 can see a recovery get properly underway.”