Analysts have backed business services providers, which include many recruitment companies, to outperform the stock market for the first time since 2001.

The Morgan Stanley Capital International’s Europe Commercial Service and Supplies Index has climbed 11% in 2005, topping the 4.7% growth experienced by European firms overall. Companies such as communications giant Ericsson are hiring again after cutting staff since the end of 2000.

According to Michael Kretschmer, a fund manager at Robeco Group in Rotterdam, investors will soon be flocking to invest money in the recruitment sector.

Merrill Lynch has advised City investors to snap up shares in Adecco and its competitor Vedior, which is the world’s third largest recruitment operation.