Prior 51.9Well, don't let the headline estimate fool you. Spain's services sector increased solidly last month owing to a further rise in new business received bycompanies. However, new order growth softened to its lowest level innine months as the latest Middle East developments start to give rise to uncertainty. Of note, new export sales declined again, whilst confidence in the outlookwas the lowest since September 2023.Besides that, higher energy prices are also starting to be a factor as overalloperating expenses rose at a rate not seen since April 2023. That comes as input price inflation surges and is going to become more and more of a problem in the months ahead.HCOB notes that:“Spain’s service sector expanded at a solid rate in March,with growth picking up on February’s low. However,despite this improvement, when combined with adownturn in manufacturing output in March, Spain’seconomy has experienced a weaker growth profile overallin the first quarter of 2026. Expect therefore official dataon GDP for early 2026 to show a slower rate of expansionthan the 0.8% quarterly gain reported for the fourthquarter of 2025.“How growth will develop in the coming months will bevery much dependent on the duration of the war in theMiddle East. The conflict has already led to a huge degreeof business and consumer uncertainty, with panellistsnoting that services new business growth has softened,and export business, already under strain before the startof the war, has deteriorated sharply.“Moreover, services firms are seeing big spikes in theirenergy and fuel bills, leading to the strongest increasein overall input costs for nearly three years. With outputcharges also rising markedly, firms are understandablyworried about the impact that high prices will have onspending in the near-term – and therefore their businessperformance over the coming months.” This article was written by Justin Low at investinglive.com.