Sir Martin Sorrell, chief executive of WPP, said that higher commodity prices had boosted the American advertising market in the first quarter, although he said that group growth in March was slower than expected.

Shares in the advertising and communications group fell 37p, 6 per cent, to 592p after WPP said that, while January and February had been strong across the group, March had been surprisingly slower, particularly in Germany, France and Spain.

Sir Martin said that March had been a “strange month”, up 3 per cent compared with 6 per cent in January and February.

However, North America remained strong, despite talk of a recession and the credit crunch that is affecting financial institutions.

Sir Martin said: “There are two explanations for this. Packaged goods companies [[25 per cent of WPP's business in the region] have increased prices to cover commodity price increases and this has led to more advertising. Interest rates could also be another factor.

The policy of the European Central Bank is to maintain high interest rates, whereas interest rates in the United States have fallen.”

Revenues for the first quarter rose 14.1 per cent to £1.56 billion in the first quarter. On a like-for-like basis, revenue growth was up almost 5 per cent. Despite the wider economy experiencing a slowdown, WPP said that North America continued to “grow faster than commentators might expect”.

Britain was the group's slowest-growing region. WPP said that Eastern Europe was now its fastest-growing region, marginally ahead of the Middle East, with revenue growth of 21 per cent.

Latin America was also strong, with growth of 15 per cent, while revenues rose 6 per cent in Asia Pacific. Mainland China and India continued the rapid growth of 2007, with first-quarter like-for-like revenues up 19 per cent in both markets.

Sir Martin expected there to be weaker growth in China in 2009. “No economy can grow at 10 per cent for ever,” he said.

Sir Martin's announcement of a slow March for Germany came as shares of ProSiebenSat.1 Media, the German media group, fell after it announced that first-quarter earnings had dropped 25 per cent and that its head of sales would leave.

Sir Martin reiterated that he was expecting 2009 to be a slower year for the group than 2008.

The group said that it was compiling its latest full-year forecasts and early indications showed like-for-like revenues growing faster than in 2007. Net new billings of £564 million were won during the first quarter.

WPP, shares of which have fallen roughly 20 per cent in the past year, has proved to be one of the stronger players in the media sector in recent years.

Gareth Thomas, an analyst for Collins Stewart, said: “The headlines are good, but the details give some cause for caution; organic growth was below our expectations and is slowing. Organic growth was 5 per cent against our forecast of 6 per cent... Of concern is the fact that March was slower.”

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