WASHINGTON, May 5 (Xinhua) -- Business activity in the U.S. service sector expanded in April after three consecutive months of contraction, the Institute for Supply Management (ISM) reported Monday.

    The Tempe, Arizona-based research group said its index of business activity in the non-manufacturing sector registered 52.0,up from 49.6 in the previous month.

    A reading above 50 indicates expansion, while one below indicates contraction. The index fell in January to 44.6, its first drop below 50 since March 2003, and was below 50 in February and March. Analysts were expecting a reading of 49.3 for April.

    For April, the new orders index declined to 50.1 percent from 50.2 in March, and the employment index increased from 46.9 to 50.8 percent.

    The prices index rose to 72.1 percent from 70.8, indicating a faster rate in price increases than in March.

    Twelve industries reporting growth last month included real estate, mining, utilities, agriculture, forestry, construction, and information, while six industries reporting contraction included transportation, finance and insurance, accommodation and food services, and health care.

    The service sector -- everything from restaurants and hotels to banks and airlines -- represents about 80 percent of economic activity in the United States.

    The inflationary pressures of rising fuel, energy and commodity prices are of major concern for businesses in the sector, according to the report.