German service sector growth accelerated slightly less than expected in April with expansion fuelled by the strongest rise in new business in 10 months, a survey showed today.
Activity growth in the sector was the strongest in three months, however, with the RBS/NTC survey's headline index climbing to a seasonally adjusted 57.8 in April, from 57.5 in March.
April was the 45th straight month that the survey - covering companies ranging from IT services to cafes - has produced an index reading above 50, signifying growth.
New business grew at the strongest pace since June 2006, when Germany hosted the football World Cup - the only month in nearly seven years when the index has shown stronger growth in new work than the April reading of 57.5. The March level was 56.7.
NTC's chief economist Chris Williamson said that while easing foreign demand had put pressure on manufacturers' order books, the service sector was going from strength to strength.
Latest business surveys show that firms in Europe's largest economy remain highly optimistic on their outlook despite the fact the ECB is expected to raise its main lending rate to 4.0 per cent by June from 3.75 per cent now.
In addition, cost pressures rose in April, with the survey's indices of prices charged and input prices both rising.
The survey showed levels of outstanding business continuing to rise, although the reading of 51.7 was just above the average for 2006 of 51.4, NTC said.
To cope with mounting workloads, firms raised their staffing levels for the 17th straight month, with the survey's employment index easing only slightly to 54.6 in April from 54.8 in March.
NTC said all areas of the service sector had picked up more work, with post and telecommunications firms and the hotel/restaurant trade showing the biggest increases.