Spain's service sector expanded in March, a poll showed on Thursday, fueling hopes of overall economic growth in the first quarter after the country emerged from recession in the second half of 2013.
Markit's Purchasing Managers' Index for the service sector, which makes up about half of economic output, rose to 54.0 in March from 53.7 in February, marking the fifth straight month the index was above the 50 line separating growth from contraction.
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"The service sector in Spain showed further signs of improvement in March as activity and new business rose solidly again," economist at Markit Andrew Harker said.
"However, companies are still having to offer discounts in order to secure sales and continued to lower their staffing levels, suggesting that a sustainable recovery remains some way off."
Service sector employment contracted in March and, apart from a brief return to growth in January, has shrunk every month since February 2008.
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(Reporting by Paul Day; Editing by Hugh Lawson)