NEW YORK (Bloomberg) — Employers in the US plan to increase payrolls next quarter for the first time in a year as confidence in the economic recovery grows, a private survey showed yesterday.

Manpower Inc., the world's second-largest provider of temporary workers, said its gauge of employment for January through March rose to six from minus two for the final three months of this year.

"Companies are seeing some demand so they don't want to let anyone else go," Jeffrey Joerres, chief executive officer of Milwaukee-based Manpower, said in an interview. "They anticipate a slow but positive 2010."

The report adds to evidence the worst employment slump in the post-World War II era may be coming to an end. Labour Department figures last week showed payrolls dropped by 11,000 in November, the smallest decline since the recession began in 2007, while the unemployment rate fell from a 26-year high.

The Manpower index improved as companies shifted from projecting additional staff cuts to no change. Seventy-three percent of employers surveyed said they anticipated staff levels will be stable in the first quarter, the highest level since the group's records began in 1972. Twelve percent expected to expand payrolls, the same as in the fourth quarter, and 12 percent projected a drop.

"The uncertainty and lack of visibility is holding back any type of real optimism in the labour market," Joerres said. "It's starting to get better, but only slightly better."

Manpower's index subtracts the percentage of employers planning to cut jobs from those who plan to hire, and adjusts the results for seasonal variations. On that basis, the net employment outlook was down from a reading of nine for the first quarter of 2009, the last positive value.

The world's largest economy has lost 7.2 million jobs since the economic slump started in December 2007. The Labor Department's report last week showed the unemployment rate last month fell to 10 percent from 10.2 percent in October.

Seven of 10 industries surveyed, including retailers and business services such as accounting and temporary-help agencies, anticipated an increase in first-quarter hiring compared with the prior three months. Construction and transportation companies were among the five industries that projected a drop in employment, while the information industry predicted no change.

Employers in the South predicted the strongest hiring prospects for next quarter, followed by the Midwest. The Northeast and West also showed gains.

Manpower interviewed more than 28,000 employers in the US.

The employment outlook is also steadying worldwide, the survey showed. Employers in 17 of 35 countries and territories surveyed said they planned to take one staff, led by those in emerging markets such as India and Brazil. Job prospects were also favourable in China, Singapore, Taiwan, and Australia. Hiring plans were weakest among more developed economies, including Japan, Mexico, Spain and Ireland.

The Manpower survey is conducted quarterly and has a margin of error of plus or minus 0.6 percentage point in the US. The global data covers about 71,000 employers.