Activity in Spain's services sector expanded at the fastest pace in over a year in May, prompting companies to hire more workers, a survey showed on Wednesday.

The HCOB Spain Services Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 56.9 from 56.2 in April. It was the index's ninth consecutive month above the 50.0 line - which separates growth from contraction - and the highest reading since April 2023, when it hit 57.9.

"Panellists reported – as also seen in the manufacturing sector – higher overall demand and greater success in acquiring new customers," Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, was quoted by S&P in its monthly report.

"Particularly encouraging was the significant rise in export business, especially in key markets like France and Germany," he added.

Services providers added more staff to cope with demand though some struggled to find workers and staff numbers were deemed insufficient in several cases, the survey showed.

Data released this week by the Labour Ministry showed the number of unemployed people in Spain at its lowest in almost 16 years.

A sister survey on Monday showed manufacturing activity in Spain expanded in May for the fourth month in a row.

The Spanish economy expanded at an unexpectedly fast 0.7% in the first quarter, outperforming its euro zone peers. The government expects growth to slow down to a still solid 2% this year from 2.5% last year. (Reporting by Inti Landauro Editing by Christina Fincher)