The AA had previously predicted that the industry would return to growth in Q3 this year, with spend rising 2.8%.
However, research suggests that modest growth is likely to be seen in Q1 and estimates that the industry will see a 3.6% year-on-year increase in Q2.
The report predicts greater growth in UK advertising across 2010, with the AA and Warc upgrading its full-year 2010 forecast from 0.4% growth to 2.3%.
Total advertising spend fell by 12% in 2009, the biggest fall since measurement began in 1982. Only cinema and internet advertising, both up 6% year-on-year respectively, bucked the downturn in 2009, with press advertising down 23% on 2008.
"It won't surprise anybody that the industry has had a tough year. But as confidence returns, it is clear that forward-thinking organisations are stealing a march on their rivals by investing in advertising," says Tim Lefroy, chief executive at the AA.