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Recruiter Adecco sees October slowdown on economic worries

Illustration shows Adecco logo

By John Revill

ZURICH (Reuters) -Adecco Group saw a slight slowdown in sales growth in October as uncertainties about the global economy crept into hiring decisions, the staffing company said on Thursday while reporting third-quarter results in line with forecasts.

The Swiss company, which supplies temporary and permanent staff to offices, factories and warehouses, said October sales increased by around 5%, down from the 6% increase in September.

"The markets are very difficult to read at the moment, it's a very diverse situation," Chief Executive Denis Machuel told Reuters, adding demand for talent services remained healthy.

"Our aim is to outperform the market whatever happens," said the former Sodexo boss who took charge in July.

For the three months to the end of September, Adecco reported sales rising 16% to 6.044 billion euros ($5.94 billion), in line with forecasts for 6.039 billion euros in a consensus of analyst forecasts.

On a like-for-like basis, which cuts out the impact of working days, currency movements and acquisitions, Adecco's sales increased by 6%.

Net profit, however, fell 19% to 108 million euros, slightly ahead of forecasts for 106 million euros, as it hired more sales staff.

The company said on Thursday it would launch a new 150 million euro savings scheme to improve its operating profit margin to 6%. The third quarter figure was 3.6%.

Adecco, along with peers Randstad and ManpowerGroup, is seen as a bellwether for the broader economy, with companies taking on staff when they feel confident.

Machuel said a scarcity of skilled workers remained an important driver in the employment market, with a high level of job vacancies in the United States.

"The market is very strong in Asia Pacific and Latin America. Europe is a little bit slower," he said.

Wage inflation was also supporting sales growth, with the company seeing price increases in the mid-single-digit range, the company added.

Its shares fell 2.3% in early trading.

($1 = 1.0178 euros)

(Reporting by John RevillEditing by Paul Carrel and Mark Potter)