MADRID, Jan 4 (Reuters) - Activity in the Spanish services sector expanded for the second consecutive month in December, supported by a marginally better demand environment amid slowing inflation, a survey showed on Wednesday.
S&P Global's Purchasing Managers' Index (PMI) for Spain's services sector, which accounts for around half of Spanish economic output, rose to 51.6 last month from 51.2 in November, above the 50.0 mark that separates growth from contraction.
"Although modest, when viewed through the prism of widespread cost pressures and ongoing economic uncertainty, the latest data point to reasonable sector performance, even more so when we add in another month of employment gains," S&P Global Economics Director Paul Smith said.
However, high inflation weighing on activity and consumption remains the overwhelming worry for many firms in 2023, he added.
A sister survey of Spanish factory activity released on Monday showed another contraction in December, though at a slower pace than the previous month.
Spanish consumer prices rose 5.8% year-on-year in December - the slowest increase in 2022, which was nevertheless marked by the steepest inflation in decades. Despite a near stagnation in the third quarter, the government sees robust full-year 2022 economic growth of over 5% and expects Spain to avoid the recession threatening many European countries.
Reporting by Andrei Khalip; Editing by Susan Fenton