Spanish Services Expansion Remains Above Average Despite Slower Demand and Higher Costs in October
Key Facts
Spain’s services sector continued to expand at an above-average pace in October, while growth in new business slowed and export sales declined, signaling softer momentum even as activity kept growing. Paul Smith of S&P Global Market Intelligence said Spain’s services economy “continued to expand at an above-average rate during October.” The composite output index, which combines services and manufacturing output, fell to 56.2 points from 56.8 points in September. Private-sector activity remained in growth territory for a sixth consecutive month. The reading shows expansion continued, though at a slower pace than in previous months.
The clearest slowdown was in new orders, with growth easing to its slowest pace in five months despite volumes continuing to rise. The increase was concentrated in consumer services and business and professional services, according to data reported by Reuters via Investing.com. The Reuters survey showed that services expansion in October was slower than in each of the previous three months. It linked the performance to moderating new-business growth and declining export sales. The combination of weaker external demand and slower new orders means sources of support for activity were uneven across sectors and customers.
On the cost side, energy and fuel prices pushed service providers’ operating expenses higher at the fastest pace in seven months. Smith said higher energy and fuel prices lifted companies’ costs, while competition limited their ability to pass on the full increase to customers. This leaves companies facing a double squeeze: more expensive inputs and limited room to raise the prices they charge consumers. Operating-cost pressures coincided with slower new-business growth, making the joint trajectory of demand and prices an important focus in assessing the sector’s performance. Smith’s statement indicates that October’s cost pressures were linked to energy and fuel.
Elsewhere in the economy, Spain’s composite output index fell to 56.2 points in October from 56.8 points in September, but still signaled private-sector activity growth for a sixth consecutive month. The index combines services and manufacturing output, placing the services reading within a broader picture of private-sector activity. The reading is consistent with Smith’s description of expansion as above average, despite the slowdown compared with previous months. By contrast, weak exports and slower new orders, alongside higher operating costs, stand out as factors limiting momentum. The source gave no separate figure for export sales or their change, but reported that they declined during October.
On the European Central Bank’s weekly schedule, board member Christine Lagarde is listed for Thursday, 5 November 2026. The schedule does not specify that the listing concerns a speech, so the only confirmed detail is that her name appears on that day’s program. The appointment follows October’s reading, which showed Spain’s services sector continuing to expand amid slower demand and higher operating costs. The trajectory of new orders, exports and costs will remain central to monitoring the sector’s momentum, while the ECB schedule gives no further description of Lagarde’s engagement that day.