Spanish services sector activity expanded in April at its fastest pace in almost a year as strong demand encouraged companies to increase capacity and hire more staff, a survey showed on Monday.

The HCOB Spain Services Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 56.2 from 56.1 in March. It was the index's eighth consecutive month above the 50.0 line - which separates growth from contraction - and the highest reading since May 2023.

"Companies broadly attributed increased activity to an improvement in new business volumes," S&P Global said in its report.

Reflecting optimism about the future, companies continued to take on more staff. The employment index stood at 55.5 in April, a fraction below the previous month's 55.6.

"Spanish service providers continuously impress with their performance," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank.

A sister survey last week showed manufacturing activity in Spain expanded in April for the third month in a row, in contrast with a decline in manufacturing activity in the euro zone as a whole.

The Spanish economy expanded at an unexpectedly fast 0.7% in the first quarter, outperforming its euro zone peers.

Spain's economy grew by 2.5% in 2023 and the government expects growth to slow down to a still solid 2% this year. (Reporting by Inti Landauro; editing by Christina Fincher)