Services sector activity in Spain grew in March at the fastest pace since May last year, according to the findings of a survey published on Thursday. The increase in new business led to an increase in company hiring.

The HCOB Spain Services Purchasing Managers' Index (PMI), compiled by S&P Global, increased to 56.1 last month from 54.7 in February. This marks the index's seventh consecutive month above the 50-level, dividing growth from contraction.

The index has remained over the 50-mark every month since November 2022, with the exception of last August, Reuters news agency reports.

"It is getting better on all fronts," stated Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, who went on to highlight growth in new export business following a contraction since last summer, predominantly fuelled by tourism in Spain.

"Overall, Spain is setting the stage for another year of above-average growth compared to most other euro zone countries," he added.

In addition, another survey revealed on Tuesday that manufacturing activity in the country grew in March for the second straight month, going against a broader decline in the euro area, with output growth at its strongest in a year.

Despite experiencing another significant rise in average operating expenses during March, with panellists attributing higher salary costs as a primary factor, optimism regarding the future remained robust according to the services sector survey. This optimism was fuelled by expectations of continued increases in sales.

Last year, Spain's economy grew by 2.5%, outperforming the country's eurozone peers. However, the government forecasts economic growth to slow down in 2024, albeit to a still strong 2%.