Spanish service sector sees first growth in activity in 26 months

The Spanish service sector just saw its first rise in activity in 26 months.

According to fresh data from market, the sector's purchasing managers' index increase from 48.5 to 50.4 in August.

That's above an expected increase to 50.0. 50 is the break even point, a number under 50 implies expansion. Above would suggest expansion.

Commenting on the data, Andrew Harker, senior economist at Markit and author of the report said:

The services PMI signalled the first expansion of the sector in more than two years in August. Coming on the back of a return to growth of manufacturing output, as highlighted by the manufacturing PMI earlier this week, this rise in services activity reinforces the view that Spain will exit technical recession in the third quarter of 2013.

Concerns remain, however, and this is highlighted by a quickening pace of job cuts despite rising workloads. Companies are reluctant to hire workers while solid, sustainable growth remains elusive and the outlook is still an uncertain one.