A waiter and waitress chat in front of customers at the terrace of a restaurant in downtown Malaga, Spain, April 1, 2025. REUTERS/Jon Nazca

MADRID (Reuters) -Spain's services sector experienced its fastest growth in 10 months in October, driven by a surge in new work volumes and increased staffing levels, a survey showed on Wednesday.

The HCOB Spain Services PMI rose to 56.6 in October from 54.3 in September. Any figure above 50 indicates growth in activity.

"Spain's private sector is entering the fourth quarter with noticeable momentum," said Hamburg Commercial Bank economist Jonas Feldhusen. "The October PMI figures fuel optimism that Spain's GDP could grow by nearly 3.0% in 2025."

The expansion was supported by domestic demand, while international demand remained subdued due to global uncertainties. Employment in the sector saw the strongest rise since July.

Despite the robust growth, input price inflation remained a concern, with costs rising due to higher salaries, fuel and energy expenses.

Confidence in the sector's outlook strengthened, reaching a seven-month high, as firms anticipated continued strong demand and planned to expand their commercial activities. However, the uncertain international environment continues to weigh on foreign demand, Feldhusen noted.

A sister survey released earlier this week showed the manufacturing sector's growth accelerated in October.

The Spanish economy is set to outperform its peers in the euro zone for the second consecutive year in 2025 thanks to a tourism boom, a strong labour market helped by immigration, and domestic consumption. The government in September raised its full-year growth forecast to 2.7% from 2.6%.

(Reporting by Andrei Khalip; Editing by Hugh Lawson)