The recruitment industry received a blow this week when Adecco, the world’s largest staffing firm, missed its profit targets.

But the firm was quick to point out that the boom in the recruitment market will continue and was upbeat about prospects for 2005, reporting that large corporations had been taking on more staff.

It plans to increase profits further with an initiative to increase its branch network and a drive to increase margins.

A spokesman said: “The key drivers for the industry are global GDP trends in developed and emerging markets, labour market flexibility as a result of more favourable legislation and extension of products and services.

“These indicators are expected to remain favourable for the staffing services market in 2005.”

Net profit at Adecco grew to €63m (£43.3m) in the first quarter, falling short of analysts’ expectations, which estimated profits in the region of €69m (£47.4m).

Revenues increased by 8% to €4.1bn (£2.8bn) and operating income increased by €108m (£74.2m).

Other good news for Adecco was an end to a proposed class action lawsuit, which was the final legacy of the accounting blunder that blighted the recruiter last year.

Investors filed the complaint against Adecco and some of its directors and officers in the US District Court in South California.

This meant one-off costs related to fighting the class action were eliminated from the results.

However US state unemployment tax reviews and a French antitrust investigation are ongoing.