The HCOB Spain Services PMI fell to 51.3 in May 2025 from 53.4 in the previous month, missing market expectations of 52.9. While this marked the twenty-first consecutive month of expansion in the sector, it signaled the slowest pace of growth since November 2023. The increase in new business softened, registering the weakest pace in eighteen months, largely attributed to persistent uncertainty, which dampened demand - particularly from international clients. Meanwhile, employment continued to rise, enabling service providers to make modest progress in reducing their work backlogs. On the pricing front, input costs continued to increase at an above-average rate, driven by higher wages and supplier charges. In contrast, output prices fell to a six-month low amid intensifying competitive pressures. Lastly, sentiment regarding future activity dropped to its lowest level since November 2023, with firms expressing growing concern over the increasingly challenging economic environment.