The Spanish service sector remained comfortably in growth territory in July, with further solid rises in activity and new business recorded. The rate of job creation remained marked, having eased only slightly from the previous month's recent high. Business sentiment eased, but remained positive. Meanwhile, rates of inflation of both input costs and output prices accelerated but remained muted. The headline seasonally adjusted Business Activity Index dropped slightly to 54.1 in July from 56.0 in June. The reading signalled a further solid expansion in activity, albeit the weakest since February.

Service sector output has now risen in each of the past 33 months, with panellists reporting the launch of new services and signs of improving client demand. Each of the six broad sectors monitored by the survey saw activity increase, with the sharpest expansion at Hotels & Restaurants. The category also posted a marked rise in new business, with Post & Telecommunications another strong performer.