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Its research counters that of the IPA Bellwether Report, which predicts an upturn in ad spend. The Bellwether survey claims that for the first time in 18 months, clients are revising their marketing budgets upwards and will increase spend on direct marketing and media advertising.

Bruce Haines, the IPA president, said: "This first quarter report reflects what we are seeing in the market, which is a feeling of improved business confidence."

In contrast, Zenith Optimedia thinks advertising spend across the seven biggest advertising markets, including the UK, will fall for the second consecutive year. Advertising revenue will continue to fall in the UK, down 1.9 per cent year on year, in line with the other six markets.

The agency claims that while the advertising recession has been caused by a collapse in corporate confidence and profits, consumers have continued to spend during the downturn because of cheap credit and rising house prices.

Next year, however, Zenith Optimedia's survey predicts that the seven-country year-on-year growth will be 1.9 per cent, climbing to 3.8 per cent by 2004.

Advertising expenditure in the UK will grow by 2.6 per cent next year and 3.8 per cent the following, the Zenith report claimed, but it predicts that it will be at least another two years before advertising growth outstrips GDP.

In the UK radio advertising spend is set to increase in June this year with outdoor following at some point in the third quarter. National newspapers and consumer magazines will follow this in the last quarter.